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As November rolls around there is lots of talk about financial literacy. Now you may have seen an image or inspirational message or perhaps even a post, blog, or listened to a podcast. Yet by far the chance of which you took the time to stop and actually acknowledge the message was probably slim to not at all.
So let’s clarify:
What is financial? Relating the finances or financial situation of an organization or individual.
What is literacy? The ability to read and write. Competence of knowledge in a specified area.
What is Financial Literacy? The ability to acquire knowledge and skill to manage money effectively.
When we look at the basics of financial responsibility we are well versed in the need to earn an income. Thereby given entitlement to use that income for whatever choice we deem necessary, needed, or wanted. This should be the end of the story, but unfortunately it is only the beginning.
There are 3 main components of financial literacy:
· Financial Knowledge
· Financial Behavior
· Financial Attitude
As well there are many principles which need to be established preferably from a young age but more often than not only acquired as you mature:
:: Money Management often referred to as budgeting.
:: Taxation and how it applies to you specifically.
:: Borrowing the pros and cons.
:: Investigate and plan before doing.
:: Investing your time and money to achieve results.
:: Preparing for the future and the unexpected.
Many will toss the word “Goal” out there. As in “What is your financial goal?” This may be reflective of the short term or long term. It is a question that is meant to achieve an answer to know what path to proceed with. However in many instances it is a roadblock.
|“My goal requires money of which I have none, so therefore I have no goals!”
|“My goal is complicated, and I’m still working on what I should work towards first.”
|“Why should I make a goal if I know I will never achieve it – that is so stupid!”
|“If I knew how to make a goal maybe I would try it sometime!”
Personally, I really don’t like the word “goal”. So I replaced it in my mind with “action plan”.
This may sound silly but in reality what is needed to achieve your goal?
+ That’s right a plan.
And what is needed to achieve the plan?
+ You guessed it actions.
Now to be fair there are many other components required to actually attain that which you wish to achieve but just that minor reset with your mindset could make the difference to clear the path to better things for future growth.
Let me ask you this one question:
What is your goal this month to enhance your financial knowledge?
Sounds like a major question doesn’t it? Perhaps even one that you will not be able to answer on the spot. Quite possibly you might need to take some time to think about it and doodle on a page writing and stroking out different things you would like learn or do.
So let’s alter that question:
What is your action plan this month to enhance your financial knowledge?
Did you feel the change in your mindset as you read that question? Suddenly thoughts pop almost immediately. You could even grab a piece of paper and start writing down a few quick points to investigate further and get started on the spot.
In Summary: Suffice it to say we all have hopes and dreams that we continue to believe will eventually happen. Financial Literacy is not a punishment for not knowing what to do with your money.
But rather it is a changing of the guards allowing you to look at things from a different perspective and perhaps seeing the light at the end of the tunnel which was invisible to you prior.
Care to comment or ask a question feel free to contact me.