Why Is Financial Literacy Important?

You may think personal finance is boring or insignificant. If your entire family is “bad
with money,” you may even think you’re doomed to follow in their footsteps. But the
truth is you can transform your life by learning basic financial concepts.

Take a look at the ways financial literacy can affect your life:

Tackling high interest rates — Finding the lowest interest rates when comparing loans
or credit cards can save a lot of money over time, and so can paying off credit card
balances each month so you don’t carry a balance and accrue more interest charges.

Taking on huge debts — Re pay and avoid debt. If you already have debt, financial
literacy can help you choose the best methods to get out of debt, either on your own or
with the help of a financial counselor or program.

Protecting yourself from bankruptcy — A good way to prevent debt from building up is
to create an emergency fund. A financially literate individual knows how much to set
aside for certain expenses and aims to keep that pot of savings in good shape at all
times, ultimately avoiding potential bankruptcy.

Now that you’re able to understand the major financial issues most people face like
emergencies, debt, and credit, you can see how financially literate people can
effortlessly avoid these mistakes, creating better financial circumstances for themselves.

This can mean diligently reviewing your credit card statements and addressing bad
spending habits. Financial literacy also helps people save for important things in their
life, such as retirement or a house.

https://www.chime.com/blog/what-is-financial-literacy-and-why-should-you-care/