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Friday, April 16, 2021

The Danger of Not Being Financially Educated and Why You Need it Urgently

Last updated Friday, March 5, 2021 17:58 ET , Source: Socialyy

Why is it important for you to have the financial education? Read to know.

New York, NY, United States, 03/05/2021 / SubmitMyPR /

Some people believe that they are able to keep track of their investments and income in a healthy and safe way, neglecting the need to learn about financial education and to prevent it from getting out of control.

How do you imagine yourself 5, 10, or 20 years from now? Financial stability is one of the most common answers to this type of question. But what are you doing today to achieve what you want for your future?

Educating yourself in this segment is more than necessary since the main commercial relationships that take place today involve money, whether to go to the supermarket to buy food, to hire an employee, or even to use public transport.

The currency of exchange is financial, and if money is at stake, there is nothing more important than learning how to use it wisely.

What is financial education?

Contrary to what some people think, the concept of financial education goes far beyond just saving money or saving it for posterity.

Financial education is about the choices we make to deal with our money more intelligently. There is no ready formula for this, as people have different salaries and different living standards.

Being financially educated is not limited to cutting expenses, accumulating a lot of money, and getting rich. In fact, it is much more than that. A person who organizes his money has a better quality of life and knows how to manage money safely.

Start organizing money - 7 Powerful Financial Education Tips

1. Settle Your High-Interest Debts

The longer you keep a debt, the more months you will have to pay interest.

Consequently, if that interest is high, the greater your expense will be in extending the payment.

Therefore, opting for a personal loan with the lowest interest rate on the market to cover high-interest debt is a great option.

2. Master the 3 Stages of Wealth Accumulation

When thinking about financial education, the accumulation of wealth is extremely important.

For this reason, three steps permeate this theory, which are: generate monthly savings, monetize it and preserve it.

3. Learn the Difference Between Price and Value to Improve Your Financial Education

Have you ever heard that some objects are so valuable that they are priceless?

If so, you are well aware that value is related to a series of qualitative factors, which not even money can quantify.

Taking this as a basis, the concept of price refers to the cost of something, the money invested to acquire it.

The value, on the other hand, is the perception of that price; that is, it is the way the subject perceives this amount, judging it to be fair or not. And it is exactly this analysis that is essential to be made.

By knowing this difference between both, it is possible to reduce consumption on impulse.

So, instead of looking at a piece and buying it immediately because it is, for example, a special brand, the customer will consider whether it is really worth it, whether it is a quality product, whether the price matches the market, and whether it will last for a long time or if it will spoil soon.

These small details make the difference and guarantee an assertive purchase instead of taking a bad and expensive product home.

4. Learn to Save in the Best Way

According to Forbes Magazine (2016), in the pursuit of saving money, people should try a method that became known as 50-20-30.

In it, 50% of the income would go to the bills, bills, and commitments that the individual already pays monthly, 20% would be saved or invested, and the other 30% would be used for superfluous expenses, such as new clothes or a movie.

5. Invest Your Money

Only those who have a large amount of money can invest, right? Lie. Even those who have little can make investments.

So, don't give up if you're still a beginner in the process. Search for courses on Udemy on making money, watch videos about money management and financial education on YouTube, read about it, and get informed. The first step has already been taken.

6. Create Financial Goals According to Your Priorities - Set Goals

Financial education makes you understand where you want to go; that is, it makes you understand your dreams and the goals you have set.

In this way, whether in the short, medium, or long term, the idea is that small attainable financial goals can be created, organizing them according to what has the highest priority at the moment.

By creating this action plan, you become more aware of what you really want, focusing on the goals you've created, rather than spending money on other options that may not be an emergency.

In addition to being a simpler way to achieve dreams, the completion of these goals gives more impetus and encouragement for the individual to fulfill the next wish, such as buying a home, a car, or even zeroing a debt that one has kept for years.

7. Create an Emergency Financial Reserve

The emergency reserve is money that is saved for any eventuality. However, it should be used only in situations that are, in fact, emergencies, such as job loss, cases of illness, among other factors.

Thus, if there is a need, this reserve will be enough to "hold the ends" during a period of difficulties.

Other than that, it is important that it remains untouchable and kept under lock and key, needing the owner of finance to have self-control and be ready to understand that this is money that should only be used as a last resort.

Conclusion

Now that you understand what financial education is and how it can make you organize your money, it is important not to lose focus.

Media Details

Company: Socialyy

Email: [email protected]

Website: https://www.socialyy.com/

NY, USA


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