subject: Some Reasons Why Having Knowledge Of Financial Literacy Is Important [print this page] Why is financial literacy important? Well, if a person is literate in this capacity, then he knows how it applies to his every day life situations. So, with that - here are a few reasons why you may wish to make sure your knowledge of the subject is up to speed:
Knowledge of this concept, or lack of it, impacts your daily life. When you know this, then you can better plan for your financial future - so you can have the life you want, with less hassle. Simply put - this means that you know the importance of 'income' as opposed to what you can actually spend so you don't go overboard. By saving up your money for those things you want to buy - and also keeping a 'buffer' on hand for emergencies - you will be making sure you don't get in over your head.
It helps you understand the big picture as far as 'credit' is concerned. When you are literate in all things 'monetary', this means you will be better able to understand that lines of 'credit' can either make your life better - or cause you to become more strapped - depending upon how you decide to use it.
For instance, lines of credit can be a blessing to some - like having extra money if an emergency arises. However, for others it can be a 'trap', if they use it unwisely, and don't stop to think of what they will actually be responsible for paying, once that money is gone.
Moreover, a person who takes the time to learn the system is that much more 'savvy' as far as choosing that line of credit or loan that fits his financial needs - and his budget - the best. So, he will shop around to get it, instead of just taking the first offer of credit he sees.
It helps you decipher your company's retirement plan - Just because you have a retirement plan at work that your employer pays into every month, doesn't mean that you will have enough money to 'retire' on, when that day arrives. Many things factor into what you will finally be getting to live on once you leave your job. Things like taxes you will have to pay, and how the state of the economy factors into normal daily living, are things people should think about, but seldom do, until it's too late.
So now you know some reasons why it is important to become educated in your finances - especially these days. If you wish to begin learning on your own, then just hop online and started researching all the information available to you.
