Financial literacy is the cognitive understanding of financial components and skills such as budgeting, investing, borrowing, taxation, and personal financial management.

financial stability

For example, a financially literate person knows that if they take home $2,000 a month in pay, they cannot spend more than $2,000 each month without going into debt. Someone with a higher level of financial literacy may know that they should save some of that $2,000 for the future.

6 ways to improve your financial literacy

1. Subscribe to financial newsletters. For free financial news in your inbox, try subscribing to financial newsletters from trusted sources.
2. Listen to financial podcasts.
3. Read personal finance books.
4. Use social media.
5. Start keeping a budget.
6. Talk to a financial professional.

The main benefit of financial literacy is that it empowers us to make smart financial decisions. It provides the knowledge and skills we need to manage money effectively—budgeting, saving, borrowing, and investing. This means that we’re better equipped to reach our financial goals and achieve financial stability.

Why Is Financial Literacy Important? Financially literate consumers not only manage money with more confidence, but also have a better chance of handling the inevitable ups and downs of their financial lives by understanding how to prevent and manage issues as they arise.

That being said, here are some simple ways to help you become financially literate.

1. Hit the Books.
2. Read Magazines and Online Publishers.
3. Use Financial Management Tools.
4. Listen to Money Podcasts.
5. Take a Financial Literacy Course.
6. Get Your Math On.
7. Read the Government Resources.
8. Break Your Consumer Mentality.

There are five (5) core competencies of financial literacy: Earning, Saving & Investing, Spending, Borrowing, and Protecting. As you make financial decisions each and every day, you should use these five building blocks for managing and growing your money.

You can evaluate your financial status and decide upon the best decision for your future. Especially when you have a family, you need to ensure the future and education of your children. And if you have huge loans, you can miss paying the bills for insurance or mortgage. Having huge debts brings troubles along.

It affects your ability to provide for yourself and family, your attitude to money and investment, as well as your contribution to your community. Financial literacy enables people to understand what is needed to achieve a lifestyle that is financially balanced, sustainable, ethical and responsible.

Financial literacy: It is the ability to know how to manage your financial resources. Financial education: It is the ability to understand how financial resources work. It refers to the technique of investing and managing financial resources and the skill to make good financial decisions.

There are five (5) core competencies of financial literacy: Earning, Saving & Investing, Spending, Borrowing, and Protecting.

What Is Financial Literacy? Financial literacy is the confluence of financial, credit, and debt management knowledge that is necessary to make financially responsible decisions—choices that are integral to our everyday lives.

Financially literate people:

• Set goals and make plans to achieve these goals.
• Set aside savings for emergencies.
• Keep their financial obligations under control and do not borrow money if they are unable to repay it.
• Monitor their spending patterns.
• Understand concepts such as loans, credit cards, and debt.

Health literacy can help us prevent health problems and protect our health, as well as better manage those problems and unexpected situations that happen. They aren’t familiar with medical terms or how their bodies work.

Financial Literacy 7-8

• Understanding needs and wants.
• Assessing your current financial situation.
• Developing your financial goals.
• Creating a Budget and following it.
• Monitoring and modifying your financial plan.

Gross pay is the total amount of money an employee receives before taxes and deductions are taken out. For example, when an employer pays you an annual salary of $40,000 per year, this means you have earned $40,000 in gross pay.

There are three types of income- earned, portfolio and passive.

Annual income is the total value of income earned during a fiscal yearFiscal Year (FY)A fiscal year (FY) is a 12-month or 52-week period of time used by governments and businesses for accounting purposes to formulate annual.

Your gross monthly income is everything you earn in one month, before taxes or deductions. This is typically outlined on your job offer letter, and you can find it itemized on your paycheck. Your net monthly income is different, in that this is the amount of money you actually take home after taxes and deductions.

To determine your hourly wage, divide your annual salary by 2,080. If you make $75,000 a year, your hourly wage is $75,000/2080, or $36.06. If you work 37.5 hours a week, divide your annual salary by 1,950 (37.5 x 52).

If you assume 2,080 hours in the work year, your hourly income would amount to roughly $24.04 per hour. In the figure above, this assumes a 40 hour work week for 52 weeks.

Converting $36,000 a year in another time unit

To someone who just graduated highscool or even college, a $30 an hour full time position would be a good (possibly great) salary. To an individual with 20 years of experience and multiple advanced degrees, $30 an hour would likely be far below market value.

Assuming all things equal, $24 per hour would be slightly above the median household income in the US. It depends on other factors, such as type of job, job location, country, cost of living, hours per week, commute, physical and mental demands, etc.