Financial Literacy: The Scope
Financial literacy is having the ability, the scope, style, or experience to handle money either in the form of capital, income, inheritance, savings or otherwise. It expands beyond having the knowledge to earn or to save or to make money, it includes understanding one's financial environment, being exposed to the diversities when it comes to commodities, their costs, use cases, value and worth for the right prices.
One of the many mistakes people make is thinking financial literacy can be learned or acquired as a degree, no! Rather it's having monetary experience from things like investing, schemes of saving, budgeting, ability to read market situation. It's about trying to be precise, detailing and concise. The ability to be able to discern between what is legitimate and what isn't. Having that disposition to recognize what might be enticing but fraudulent. The inch perfect skills, to value long-term and seeing the future as an integral aspect of life that needs to be taken care of.
A lot of people do not pay cognizant to so many important things in their life. For example, for you to work, you need to be health, to take care of emergencies, you need emergency funds or savings stashed away somewhere. Having a goal or aim to attend college, must not be built on mere dreams but by adequate recognition of these relevant essentialities and planning for them earnestly.
Another aspect is planning to take on responsibility that your active or passive income can handle. So many people in Nigeria have children beyond their means, making it difficult to provide for them, they build their life on the hope that good fortunes will smile on them. They do not have rigid or solid plans, or estimation as to what they're earning currently, what they could be earning tomorrow, or what they are likely to earn in 5-years time.
In many African states....
Nigeria for one, people must be cognizant of the value or worth of money, it's purchasing power. They should be able to make references to what the monetary value of a fiat denomination can purchase let's say 6 months ago in comparison to what it can actually purchase at the moment. This can determine what they might choose to save in. In dollar, a stable economy currency or even crypto for the ones who are aware.
People in places with unstable economies are financially gullible and this is because of their lack of exposure, not necessarily educational background, but the inability to be exposed to financial trends, having ideas of what is worth it, what should go and what shouldn't, and this is why they go into bankruptcy. They borrow loans from microfinance ventures without even having a solid framework or a fail-safe in case of risks. Not having the right financial education can bring this.
Financial literacy helps one to prevent so many dangers. Another thing is calculating the essence of money spent and how likely it's going to be financial in the long run. I used to tell people, whether they're uncertain if they'll see the future or not, they need to actually plan for it. Things like competition when it comes to spending should be avoided. So many people fill their ego needs by spending ostentatiously to prove a point.
Having money, and attaching discipline to it, is being financially responsible. This is why we should always consider the futility of a commodity, scrutinize the potentiality and the value it is likely to retain after a long while. I was going to buy a phone sometimes last year, the price of the phone for the first variant was about $200 and the second with extended ROM was like $300. Firstly, I saw the futility of using an extended ROM, so why pay for extended features that I might end up not using? I paid $200 for the other variant and saved myself $100.
Vast Knowledge Of Finance Management
Being Financially literate is having vast knowledge about finance management, reading vigorously about finance, being abreast with some investment schemes. Being financially prudent is only an aspect of being financially literate. A lot of people spend a lot, make rash decisions, nevertheless they recognize and understand their limit, knowing one's limit is part of it.
Another thing is, the world is currently changing, you're either self-employed or you'll be unable to build a life without depending on deadlines to survive. Passive income is currently the way, realizing the potentials of crypto for example rather than listening to financial institutions, commercial banks and the rest, or choosing to be conventional about making money. There are many reasons to aim for financial literacy, and hopefully I shall be talking about this next.
Interested in some more of my works?
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A Sense Of Self Accountability: Why Minimalism Exceeds Beyond Spending Money.
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My name is @Josediccus, a young Nigerian entrepreneur who is a Vlogger, A Psychologist, Poet, Sports Writer/Analyst & Personal Finance Coach. I'm using my contents as a process to create shared meaning as well as create expressions through which people on/off hive can relate. I believe content is a process to be enjoyed and relished and I'm up for any collaborations in my field stated above. Cheers
@Josediccus, your brother-in-pen & heart
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