It’s becoming more important day-by-day. Unfortunately, this is something that you will likely have to learn on your own. Traditionally, this type of information has not been taught in school. As a result, so many of us have failed to understand the meaning and importance of terms such as the Rule of 72 and net worth. I believe that yes, it is very important to be financially literate and understand money related concepts and terminology.
Perhaps, you have a foundation or related knowledge. Nevertheless, if you are intentional about taking the time to prioritize self-education, you may experience benefits such as these from doing so:
You Can Make Better Choices
When you are aware of the meaning of money and how it works, you can make better choices. For example, rather than spending money on depreciating assets that do not bring you joy, you may consciously decide to forgo the purchases and think more about your long-term goals and dreams. Understanding things like how long it will take your money to double and what the amount could be at a point in time, can serve as motivation to make smart financial decisions.
You Are Able to Teach Others
When you learn, you can teach those that you love, lead and serve. When you share what you learn, you will find that it can potentially become ingrained in your psyche. An often-overlooked way to teach is by modeling principles that you have learned. For example, calculating your net worth on a periodic basis and sharing the numbers with your children or other family members is a way to teach and involve them in the process. However, this does not happen if you do not take the time and make it a priority to educate yourself.
Easier to Achieve Financial Goals and Dreams
Understanding the meaning of compound interest and terms like the Rule of 72 can serve to inspire a person to use a “telescope more often than a microscope”. This can also serve as motivation to think long term. In addition to learning, it is important to get a financial plan, which can serve as a tool for making you aware of where you stand. It can be helpful in clarifying your goals and dreams, and it can also serve to keep you focused on the journey.
Taking control of your financial education is very important. It is important and may be helpful for you to enlist the help of a trusted advisor. Begin your journey today if you haven’t already done so.
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This content is developed from sources believed to be providing accurate information, and provided by Kelly Financial Planning. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.