Financial Literacy:

Knowing What You Need

To Know To Achieve Your
Financial Goals
Muh. Aslam Arifianto
Hukum Tata Negara
(23382071065)
What is Financial Literacy?
Financial literacy
• The ability to effectively evaluate and
manage one’s finances in order to make
prudent decisions toward reaching life’s goals
• The understanding of:
- Money
- Cash flow
- Basic economic/financial concepts
- Debt/risk management
Achieving financial literacy
• Five Key Areas of Personal Finance:
- Money and income
- Money management
- Spending and debt
- Savings and investments
- Risk management
Money and income
• Time is money
• How many hours do you need to work to pay
for your mortgage, car insurance, electricity
bills, extras, etc?
Money management
• Budgeting
• Prioritizing
Spending and debt
• Benefits and costs of spending alternatives
• Credit as a basic financial tool
Savings and investing
• Saving means not spending money.
• Investing means that you earn a return on
the money you put into it.
Risk management
• Insurance
• Understanding the markets
- 50% of Americans own stocks
• Identity theft
 Financial literacy isn’t just
a matter of knowing what you
have and knowing your options.
It is a matter of planning for
life’s milestones.
 Creating your first
overall long-term financial plan
Buying your first home
• Establish good credit
• Understand “real costs”
• Assess risks
Getting married
• Understand “financial partnership”
• Establish separate and joint credit and bank
accounts
• Create wills and trusts
• Identify beneficiaries
• Choose owners on title assets
Financing a family
• Budget
- Education, health care, child care
• Manage risk, insurance
• Create wills
• Instill financial literacy
Starting a business
• Understand
- cash flow
- expense timing
• Manage income and expenses
Planning for Retirement
• Determine how much money you will need.
• Determine where your retirement income will
come from.
• Devise a budget and investment strategy to
help you meet your goals.
Preparing a will
• Designate beneficiaries
• Determine asset distribution
• Identify insurance
Unexpected milestones
• Loss
• Sandwich generation
• Divorce
Financial literacy education

• Lifelong learning courses

• Financial media
• Internet resources
• Your CPA
For more information

www.360financialliteracy.org features financial

education to help consumers at every life stage.
 Financial Literacy:
Knowing What You
Need To Know To Achieve
Your Financial Goals