Uhm, So What’s the big deal with being financially literate?

Duh, so you can experience financial freedom and live your best life! The answer is really that simple and this blog post should probably end here.

But, since I am in the mood to preach the financial gospel, hold onto your money bible cause this will be a short money sermon. Let today’s random Monday money rant begin.

As a result of a consumption mentality, poor planning, laziness, lack of financial education and wanting to sometimes show people that we are living and doing better than them, some of our brothers and sisters are living and breathing to solely pay bills and debts. Treating each month like an episode of survivor waiting for those dreaded words, “the tribe has spoken”. I have been there before. Spiralling debt, no emergency fund, spending more than I earn, not saving, not investing in income generating assets. This cannot be normal. A classic example of a lack of financial literacy.

I’ve often seen and heard people throwing the term “Financial literacy” around without fully acknowledging what it is. It’s a state in which you have the adequate knowledge, skills and confidence to make responsible financial decisions that suit your financial situation given your available resources. A mouthful. So let me break it down. Knowledge, skills and confidence comes from experiences and the active accumulation of information. Like reading financial books, seeing a financial advisor, attending cool events (like our Youth Money circle) and listening and watching financial shows. With this, you are better able to budget, analysis your finances and available resources and make decisions. Financial literacy is a process that you need to be committed to.

It has become even more consequential now, because as consumers we have to make even more financial decisions than our parents. This relates to retirement planning, budgeting and choosing from various complex investment and savings products that have different interest rates and maturities. A mine field of decisions. We are also living longer now due to advancements in technologies and medicines. This simply means we need more money for retirement than prior generations. This is outside of the fact that it is incredibly expensive to stay alive. Food, transportation, shelter and education. Nothing is cheap and inflation keeps rising. You cannot afford to not get your finances in order.

Once you have, you will be on track to attaining FINANCIAL FREEDOM! This is defined by one of my fav authors; Warren Ingram, as , “when the income generated from ones assets exceeds their expenses”. Hmmm, he also has 4 rules that need to be followed on this journey to financial freedom. We will investigate this further in my next blog. AMEN!