Understanding how money works and how to manage yours is essential for having a strong financial life. Becoming financially literate is something everyone can and should learn to do, especially teens. With today’s online tools and resources, it is even easier to empower yourself with a financial education. In this blog, we will discuss financial education and the types of resources offered by your preferred credit union or bank.
What Is Financial Literacy?
Financial literacy can be defined as understanding the essential concepts of personal finance, such as budgeting, saving and borrowing. Becoming financially literate means creating a better relationship with money so you are comfortable and knowledgeable about making financial decisions throughout your life, according to Investopedia.
Financial literacy education in the U.S. is improving but more needs to be done, according to Forbes. There are many ways to improve your knowledge about money. You can read books, listen to podcasts, subscribe to personal finance content, consult with professionals, take online courses and much more. The best thing about it is that it is never too late to start and the information you gain will help you for years to come.
How Financial Literacy Impacts Your Financial Life
Learning about money has many benefits, including reducing stress in your life and providing you with more peace of mind. Here are more reasons why your financial literacy matters:
- Better Money Management: Knowing how to manage your finances means you’ll be mindful to use your income in more beneficial ways. For example, chances are you will budget better by ensuring each paycheck is split up among your savings, bills, rent and entertainment without running out of money or relying on credit each month.
- Save Better: Understanding the reasons why you need to save and knowing how to creates a strong foundation for your finances. Financial literacy can help you establish a solid nest egg to help you reach your savings goals or create an emergency fund to assist you with unexpected expenses.
- Manage Credit and Debt Wisely: Knowing how to manage credit and debt wisely is another way to positively impact your financial life. You’ll learn how to apply for a loan, how to get the best loan terms and how your credit plays a big role in your loan approval. You’ll also better manage your debt by making monthly payments on time for all your loans, as well as understanding the ways to keep your credit score high.
- Financial Security: Financial literacy is the cornerstone of money management that can lead you to financial security, where you don’t have to worry about money for day-to-day living. You live within your budget, have strong savings habits, possess a good credit score, manage your debt smartly and borrow only when necessary and at low rates.
What Tools Are available To Become Financially Literate?
According to Experian, there are several different tools you can use to aid your training. Here are some of the main ways you can learn more about money:
- Publications: Books and magazines on money-related topics are great ways to learn about finances. Visit your local library first to see if you can borrow them before you buy it online or at a bookstore.
- Podcasts: Financial education podcasts can help you learn about money while you’re on the go. They usually cover a range of financial topics and are available on popular podcast streaming services.
- Online Content: There’s a wealth of searchable online content related to money management, personal finance and similar topics. Check with your preferred financial institution to see what digital resources it has available. This way you’ll know the information comes from a trusted source.
- Financial Consultants/Credit Counseling: Another way to learn is through in-person sessions with financial consultants and counselors. Consultants are focused on helping you make smart decisions with your investments and assets, while counselors help you manage money-related challenges, such as debt and credit.
There are an array of tools available to improve your financial education. Select the ones that best suit your educational style so that you stay engaged while learning.
How TCU Can Help
Travis Credit Union believes that financial education is one of the most impactful improvements you can make in your life. That’s why TCU has partnered with Enrich to bring you Knowledge Base, a free online financial education platform. Use it to explore a range of financial topics designed to empower you at every stage of your financial life.
It’s just one of the many tools TCU has that are focused on helping you better plan, save, spend and borrow. Enroll in Knowledge Base today!