Financial Literacy: Did You Know
Explore this module with an open mind to challenge yourself to learn about money and finance. Within this module you will learn the essential elements for being financially literate. You will be directed to a number of resources for gaining financial planning information. By using the provided links you can gain the basic skills to become more informed. Learn different finance terms and gain a better understanding about saving and investing. Listen to the advice on how to become a better saver and learn how keeping a savings account is important for your future. Read the inspiring stories of individuals who have helped their communities make a change for the better and learn about how different regions in the world are working to educate young people about being smart consumers. Take the time to carefully consider the recommendations and see how these tips can help you and your family secure a more promising future.
Learning how to be financially literate can help you take charge of your finances and secure a better future. By reading and understanding this module, you will gain the necessary tools to help manage your finances and help you build a more financially secure future. The term financial literacy has been used quite often in the last few years. Many countries are adapting and implementing financial literacy programs for children and adults. Often one may hear reports about how being financially literate is important, but what exactly does that mean? Financial literacy or being financially literate means that a person has the necessary skills and knowledge to make smart decisions about money through spending and saving behaviors. The basic categories that make up financial literacy include: saving, budgeting and banking, credit cards and credit, and investing. You can obtain financial literacy skills easily, and this module will help you do that. Saving begins by spending less and putting the rest in an interest accruing savings account and by borrowing money for essential things only when absolutely necessary. By adapting these habits, you can take control of your finances and help build a better future for you and your family.
Being financially literate means that you understand the importance of keeping a budget and this module will help you learn how to make a budget to gain control of your future. By planning out and knowing where your money is going, you can keep better track of your spending and savings to prevent overspending. Using credit cards may be very tempting and convenient, but it is easier to overspend when using them because of the “pay later” attitude that can sometimes go along with using those cards. By having the sufficient funds to pay off the credit card balances at the end of the month, you can prevent costly and dangerous interest and service fees from accruing.
Many people throughout the world have a do not understand financial concepts so they do not have smart money skills. This module aims to bridge the gap and help you gain the essential tools to improve your future and life. Sharing knowledge about saving, spending, and investing becomes a critical behavior that you can adapt and help your friends, family, and colleagues. By sharing the knowledge and information you gain in this modules with others, you can help them be good savers, savvy consumers, and smart investors.
Here are some important things to remember:
- You are in charge of your own destiny. By taking the necessary steps to get informed and understand, you can help build a more financially stable future. Read, save, invest, speak to people, and share your knowledge with others. Markets and trends change so it is important to keep up-to-date with the field. Set goals for yourself and take all the necessary steps to achieve them. If your goal for the year is to save, then do it. It is never too late to begin saving or learning about personal finance.
- Saving matters. Save money each week and put aside some extra money for yourself. Open up a bank account. Cut any unnecessary costs. The little things add up so try and think of more ways to cut costs. Try bringing a lunch instead of going out to eat. Convenience and time may be of matter, but it is also important to think about spending and saving too. If you make an effort to save, then your hard work will pay off. Everyone likes to save money, right?
- Ask for help. If you are struggling with your finances, and you do not have the answers, ask for help. Asking for advice for getting yourself back onto track and getting out of debt is a smart choice. There are professionals that can help, but you can always ask a friend that is good with managing their own money. Ask them how they manage their funds and what they do to save money. You will feel better once you seek the advice of someone who can guide you on getting yourself back on track and getting your finances in order. Other sections in the module can guide you to obtain a greater understanding for being financially literate.
25 Lesser Known Facts
- In developing countries, over 2.7 billion people do not have access to financial services.
- Over a billion people throughout Africa, Latin America and Asia have mobile phones, but they do not have a bank account.
- 5% of Tanzanians have bank accounts. http://news.bbc.co.uk/2/hi/8194241.stm
- For every 100,000 people in Ethiopia, there is only one bank. http://news.bbc.co.uk/2/hi/8194241.stm
- 85% of the 1.3 billion people living in Southeast Asia live on less than $2 a day. http://library.thinkquest.org/05aug/00282/over_world.htm
- 5% of American households owe $8,000 or more on credit cards. http://moneycentral.msn.com/content/banking/creditcardsmarts/p74808.asp
- 20% of American families that earn less than $50,000 a year spend almost one half of their income to pay debts. www.practitionerresources.org/cache/documents/49974.doc
- NASDAQ merged with the American Stock Exchange in 1998 to create NASDAQ-AMEX.
- The size of the world stock market at the beginning of October 2008 was estimated at $36.6 trillion. http://www.investortrip.com/25-stock-market-facts/
- The New York Stock Exchange (NYSE) would close for the day if the market dropped by 30%.
- Warren Buffet, a well known stock investor gave 83% of his wealth to the Bill and Melinda Gates Foundation.
- World Bank estimates that nearly 1 billion people live below the international poverty line. If a person is financially literate, he or she is less likely to live in poverty. http://450.aers.psu.edu/economic_conditions.cfm
- Most marriages end in divorce because of money related issues.
- Most of the people not using bank accounts in the U.S. are immigrants, elderly, low income families and minorities.
- Within their first week of college in the U.S., first year students are offered about 7 credit cards.
- Credit card companies typically give students a credit line between $500 and $3,000. http://www.moneyu.com/index.php/financial-literacy-facts
- Teaching your children early on about saving and spending will help them make wiser financial decisions.
- Many parents lack the knowledge to teach their children about personal finances.
- Wells Fargo, a financial services company, reports that only 5% 18-21 year olds are confident that their financial goals will be achieved. http://personalmoneystore.com/moneyblog/2010/07/16/financial-literacy/
- MPESA is a Safaricom service allowing individuals to transfer money using a mobile phone. http://www.mpesauk.co.uk.
- Over 7 million people subscribe to the MPESA mobile money service in Kenya. http://www.mpesauk.co.uk/index.html
- 1,596,355 businesses filed for bankruptcy in the U.S. in 2010, which is a 13.8% increase from 2009. http://www.bankruptcyaction.com/USbankstats.htm
- 1,416,902 people in the U.S. filed for bankruptcy in 2008. http://www.bankruptcyaction.com/USbankstats.htm
- 30% of the people filing for bankruptcy in the U.S. are women. http://www.bankruptcyaction.com/USbankstats.htm
- It has been estimated that in the UK, every adult should save about £10,300 a year to retire comfortably. http://www.guardian.co.uk/money/2010/sep/22/pensions-gap-uk-worst-europe