We live in a time where we are able to buy anything we could ever want with the click of a button. It’s exciting, and fun… but it can be hard to keep track of money. It’s become far too easy to overspend on things we didn’t intend on.

We spend a little bit here and a little bit there. All of a sudden, there’s nothing left to help us get ahead financially. But it doesn’t have to be that way.

What is Financial Literacy?

The best place to begin is by gaining a comprehensive understanding of finances - we call this financial literacy. Financial literacy encompasses concepts such as saving, investing, and debt. Being financially literate can lead to an overall sense of self-trust and financial well-being. 

Why it’s important

Mastering these concepts may not be easy, but they will offer you financial guidance for a lifetime. Financial literacy can help you avoid accumulating unsustainable debt and protect you from becoming a victim of financial fraud.

Let’s have a look at five key concepts to get you started on your journey to financial freedom.

1. Lead a Lifestyle You Can Afford

It may not feel like it, but eating out and partying all weekend are luxuries that we often can’t afford. It’s good to have fun, but burning through our money each week isn’t a very financially literate decision. That money would be better put towards savings.

How It Helps

There’s no point driving around in a fancy car when you’re neck-deep in debt and can’t afford to pay the lease. By living a life you can afford, you can steer away from the crippling grips of unsustainable debt. You can put the money aside for your future instead. If you’re smart and save up, you could actually be able to afford to own a fancy car one day.

2. Start a Budget

Budgets are always a hot topic and for good reason. Creating, maintaining, and adjusting a comprehensive budget is the most basic step when it comes to financial planning. Mastering budgeting basics is a reliable first step for any novice who wants to improve their financial literacy. 

Why keep a budget?

Managing your money is all about planning. A budget lets you know where your money is coming from and going. Without a budget, it’s hard to manage your money effectively. Organizing your expenses means you can be financially productive

Benefits of budgeting 

It’s easy to underestimate how much money is being spent on essential things, such as bills, food, rent/mortgage, and transport. Laying out all of your expenses helps you identify areas where you could save some money, perhaps by switching your mobile phone contract.

3. Upskill for Free

The truth is, you’re not going to make any progress on your finances if you don’t put in the work. It helps to be informed, but you don’t need to blow your cash on expensive courses. Try these free ways first:

Subscribe to financial newsletters

Getting financial news straight into your inbox is a good way to stay up to date. There are many experts offering snippets of financial planning advice online, who send regular updates via email. Look for two or three email newsletters to subscribe to. Try finding someone who you can relate to, perhaps a financial advisor for minorities or African American financial planners.

Listen to financial podcasts

There is no better way to maximize your time doing housework or out walking the dog than listening to podcasts. It’s like listening in on someone else's conversation. Jump onto the Podcast app on your phone and start searching for financial guidance.

Read financial planning book

Sometimes you need to go hard or go home. Financial planning books take you down a comprehensive route of learning, jam-packed full of facts and tips for you to absorb. You don’t need to fork out for brand new books though, head down to your local library and see what you can lend for free.

4. Learn From a Pro

If you prefer a more client-centered approach to learning, why not employ someone to help. There are many financial services out there who can tailor their financial guidance specifically to your needs.

Find the Right Advisor for You

Financial planners come in all different shapes and sizes, try to find one who can relate to you. If you’re a student, look for financial services that specialise in student debt. Maybe you’re an entrepreneur and need someone who is skilled in business start-up. It’s even becoming easier to find a financial advisor for minorities, or African American financial planners. Don’t be afraid to shop around to find the right person.

How to Find Financial Services?

You’re going to want to find someone local to you, or someone who is set up to communicate online. Be specific in your searches, you’re wanting financial guidance from someone who is reliable and can offer a comprehensive client-centered approach. Try being specific with your search words, like African American financial planners or for a financial advisor for minorities.