Basic Financial Literacy

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Individuals can make more informed decisions with a solid understanding of some of the most fundamental financial principles. It seems like every single day, we’re overloaded with information about the economy, financial risk, insurance opportunities, banks, and credit. Financial literacy allows you to sift through this information and pick out key snippets relevant to your financial well-being. Furthermore, understanding the financial landscape can help individuals recognize and avoid scams. Protecting your assets and personal information can be a significant setback, so be careful with whom you share your personal information.

 One way to set yourself up for success is accountability for your assets. An essential part of budgeting is reviewing your monthly income and expenses. If you live in a dual-income household, add that number and compare it to your monthly expenses. Think about your house payments, car payments, grocery bills, monthly retirement investments, and every other recurring expense, then compare that number to your monthly income. By reviewing your finances regularly, you can set yourself up for success by creating a budget. 

 Setting up a budget is essential for those that need to watch their spending. Outlining your monthly income and expenses enables you to allocate every dollar towards a necessity before shopping for luxuries. You can also budget for long-term goals by setting aside money for a down payment on a house, a vacation, higher education, preparing for retirement, or even paying off debt. Budgeting also forces you to take a closer look at your spending habits. With this insight, you can decide where to cut back. 

 Being flexible and ready to adapt your finances to life changes is crucial for maintaining long-term financial stability. Major life events such as marriage, parenthood, buying a new home, or changes to your job status can all affect your finances. Consider how it may affect your monthly spending habits when anticipating one of these changes in the coming months. At some point, life may even throw you a curveball via an injury, job loss, or a natural disaster. To alleviate the financial shock from one of these events, plan ahead by getting insured.