.

focuses on the ability to manage personal finance matters in an

efficient manner, and it includes the knowledge of making
appropriate decisions about personal finance such as
investing, insurance, real estate, paying for college, budgeting,
retirement and tax planning.

involves the proficiency of To be FINANCIALLY LITERATE

financial principles and means having the ability to not let
concepts such as financial money – or the lack of it – get in the
planning, compound interest, way of your happiness as you work
managing debt, profitable hard and build your dream
savings techniques and complete with a long and
the time value of money fulfilling retirement.
The benefits of having a sound financial
plan:
• It can help you avoid mistakes/
sidetracks
• Helps you make smarter decisions
• Can insulate you from the turbulence
in the economy
• Makes money work for you!
a conscious and deliberate way
of setting aside a portion of the
personal income
 delaying
savings or Being
putting overly
savings off dependent
for another
on others spending on
time
includes spending liabilities or items
on unnecessary that decrease in
value overtime; not
items; Impulse
knowing how your
buying; hedonistic money will grow or
lifestyle work for you.
1. Start tracking your monthly expenses 2. Identify fixed and variable
In a notebook or a mobile app, write in expenses
every time you spend money. Be diligent Fixed expenses are ones that
you have every month: rent,
about this, because it’s easy to forget.
mortgage, car payment,
This is the foundation for your budget. electric, bill, water bill, student
loan payment. Variable
3. Add up the totals expenses are costs that go up
After three months, calculate how much you are and down each month and
spending, on average, per month. And look ones that come and go –
at the categories. groceries, pet supplies,
4. Study your variable expenses haircuts, concert tickets, etc.
6. Now set your budget
This is where most people tend to overspend. Start making the necessary cuts in
Decide what gives you the most pleasure from your fixed and variable expenses.
these monthly expenses that you feel these costs Decide what you want to save
are worthwhile? And which ones can you really do every week or every two weeks.
without? Be honest, and start cutting. This is the The leftover money is how much
beginning of the hard decisions. you have to live on.

5. Factor in savings
A key part of budgeting is that you should always pay yourself first. That is, you should take a portion of every
paycheck and put it into savings. This one practice, if you can make it a habit, will pay dividends (literally in many
cases) throughout your life.
https://www.annuity.org/financ
ial-literacy/