A healthy financial future, like many other things, takes time, patience, and some financial education. We all have to start somewhere, becoming financially savvy may not be easy, but luckily there are steps we can all take to reach our financial goals. Financial stress was one of the many unanticipated effects of the Covid-19 pandemic that affected almost everyone, but it had the greatest effect on those who were already financially vulnerable. The pandemic made it clear that most people lacked adequate preparation for the possibility of receiving a pay cut, losing their jobs, or needing to find alternative sources of income. More than ever, we must financially plan for the future to prevent the uncertainty that would follow another global crisis.
The Advantage of being financially literate
Preparedness - A major benefit is that those who are financially literate are better prepared for the future. If the last three years have taught us anything, it is that we never know what will happen.
Survival - Your odds of surviving a temporary financial setback are significantly higher because you're anticipating any financial losses.
Knowledge - People who are financially literate are less likely to fall victim to fraud because they understand their finances and take the time to make sound financial decisions.
The 101 in financial literacy
The term "finances" might seem daunting. Most people immediately think of Stock Markets, interest rates, and other complicated financial terms. However, your "finances" can be as straightforward as the money you earn and the expenses you pay. It all relies on your situation and financial objectives. Furthermore, there are a few basic financial literacy terms and concepts that you should become acquainted with and those are listed below.
The four pillars of financial literacy and what these words mean
Simply put, budgeting means planning the amount of money you can spend on the things you need, based on how much you earn and can really afford. It may seem complicated at first, but it isn’t once you understand exactly how a budget works and what it’s for.
Debt means money that you owe a person or institution and need to pay back.
Saving is a very important part of living a healthy financial life. It may seem hard to do at first, but once you understand its true benefits – and how you can get started – you’ll realise that saving really puts power in your hands.
Investing is one of the most important parts of planning a bright financial future. An investment is something you spend money on today that will make you more money – or put you in a stronger financial position – later on. While investing may cost money upfront, in the end, it should make you more money than it cost you to begin with.
Learn more about the Four Pillars of Financial Literacy.
The best resources for your financial literacy journey
Here are a few of our top Wonga articles, our 52 week savings challenge, budgeting advice, and tips for avoiding fraud like phishing scams to assist you in developing your financial literacy.
Download our 52-Week Savings Challenge if you wish to become more consistent and stringent with your savings, which might help you save R14 000 and establish a healthy-saving habit year after year.
These massive saving tips will assist in your financial knowledge when it comes to savings.
Be alert with all types of fraud attempts which could possibly put you in a negative financial predicament. Here is our blog article on Top Tips for Avoiding Phishing Scams
Begin your financial literacy journey today.
Now is the time to make a budget and begin learning the skills necessary to achieve a better financial future. Unfortunately, this type of thing is rarely taught in schools. To get good at it, you must practise and attempt it on your own. But the ultimate result is well worth it. Here is how to Create a Budget and Stick to it
If you can make and keep to a plan, you'll be well on your way to not only financial success but also financial stability, which means no more fretting about debt collectors and late credit card payments.
Learn more with our very own Money Academy which will boost your personal knowledge in financial literacy.
Share what you have learnt
One of the best ways to financially equip our children and loved ones for the future is to share what we already know about financial literacy. Since financial knowledge is not always taught in schools, it is important for us to pass on what we have learned to future generations.
Improving your financial situation has numerous advantages. Investing the time and developing a better understanding of financial literacy can set you up for a more prosperous financial journey throughout your life.