Financial literacy is the ability to understand how to make competent choices to manage your financial well-being. When you are “financially literate” you’re able to manage your income and divide it towards multiple goals simultaneously.
Being financially literate is not just about how to pay down debt, but also how to manage your daily financial life, such as savings and investments. While paying down debt is always a good thing, it should not be the only item you focus on. A great way to start is to take a portion of your income and place it into a separate savings account, that way you’re not tempted to use those funds. By doing this, you’ve started your first step on becoming more financially literate. The art of savings is a great skill to have a sound knowledge on, creating ground for financial success.