Becoming Financially Literate

Photo courtesy of Adobe Stock Images by Rudzhan

When it comes to finances we all have more to learn. And the truth is, if managing our finances were simple more of us would be better at it. Therefore, becoming financially literate is complex because money is not a one size fits all conundrum. As we conclude highlighting April as financial literacy month let’s answer the question, how can you improve your financial acumen?

One of the first steps in becoming more financially literate is being aware of your most effective learning style. As a basic example some people are visual and some are auditory.

Academic

One of the best ways to become financially literate is to register for a financial literacy course at one of the best universities in the country. For example, Duke University has a financial literacy program covering personal finances. This program covers topics such as budgeting, credit, savings and taxes just to name a few. But if I were you, I would seek out some lesser known educational institutions which offer free financial literacy courses. Why pay when you can get a free course to learn the basics.

Magazines and Newsletters

Magazines and Newsletters are another great way to educate yourself. Here you have a seemingly endless supply of options. But consider starting with personal finance journals and magazines like Money, Forbes or Kiplinger. Obtaining a paper or digital subscription to some of these periodicals would be a game-changer. Annual subscriptions can cost as low as $14.00 dollars. That’s a small price to pay for some good advice before making your next financial decision.

Podcasts

With each of us living such busy lives and having no time for ourselves, listening instead of reading is another great option. One of the fastest growing forms of financial literacy education today is happening on podcasts. The great thing about a podcast is that you can listen to it at your convenience while multitasking.  Sometimes, I listen to it while getting ready for work or getting my day started.

There are many personal finance or investing podcasts out there from which to choose. For example, there is a podcast by National Public Radio (NPR) called “Planet Money.” At times it’s just good information about business, the economy or consumer affairs. Nothing too heavy that may overwhelm you. Do your own research and find a format you like. You don’t have to listen to only one and no one podcast will provide you all the answers.

Financial Advisor

Another way to become financially literate is to connect with a financial advisor. Many people think of retaining a financial advisor when they are thinking about investing in the stock market or making complex investments. But I would say, you need to consider first the role or services a financial advisor provides in conjunction with your objectives before moving forward. A financial adviser should generally provide not just investment advice but should also have you considering your savings, budgeting, taxes, insurance and retirement plan. In other words, they examine your entire financial health and help you arrive at your desired financial destination. Financial advisors should synthesize all aspects of your finances and work with your lawyer, accountant or other professionals.

If you are going to work with a financial advisor, how can you find one or what should you look for? At the very least I would want to know if the person is a Certified Financial Planner (CFP). Being a CFP is the highest level of accreditation one can have in the advisory business. Does the person or company sell insurance products from which they can earn a commission from you? And another key question I would want to know is whether or not your financial advisor is willing to sign a fiduciary oath. This document basically says that the company or person would act in your best interest 100 percent of the time.

Becoming Financially Literate

Becoming financially literate is a process. There is no silver bullet or magic solution. It can even happen through casual conversation among friends. For example, I was speaking with a friend last week who recommended a book called Get Good With Money by Tiffany Aliche. The book is highly rated by the Wall Street Journal, New York Times and USA Today as a best seller. The best incentive for becoming financially literate is to view it through the lens of freedom and choices. If you want to live the lifestyle of your choice, enjoy the freedom to do what you want to do and reduce your stress, then get financially literate!

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