Benefits of Financial Literacy in this Pandemic Era

In this new pandemic era, becoming financially literate is one of the critical keys to protecting your money, growing your savings, increasing your earnings and creating a reliable income strategy even for retirement. Financial literacy is very essential especially during periods of economic turmoil and uncertainty that we’re in now. Truthfully, lack of financial literacy affects many people in both developed and developing economies in the world today.

Now, let’s take a look at what Financial Literacy means!

Financial literacy simply includes acquiring a basic knowledge of budgeting, saving, investing & debt management which helps one make sound financial decisions that are integral to our everyday lives. It is no news that the global COVID-19 pandemic has wreaked havoc on the financial lives of many people across the globe. There has been financial stress on many individuals, entrepreneurs, employees caused by the effect of COVID-19 and this has become the cause of low productivity, unplanned absences, lower job performance and great distractions among employees in various organizations. This stress impacts the emotional and physical well-being of employees and even entrepreneurs.

Here’s why you need to be financially literate!!

Understanding financial literacy can open you up to divers income generating or investments strategies, systematic savings, budgeting and wealth management strategies. While lack of financial literacy increases uncertainty and stress. Acquiring this knowledge also helps increase job productivity, boost job satisfaction, save costs on health care, retirement and turnover. In other words, as an employer or employee, you get to perform better, efficiently and effectively if you ain’t distracted by the stress of personal financial issues.

A Brief Look at the Core Pillars of Personal Financial Literacy:

• Budgeting. Creating a budget and living within your means is one of the most basic aspects of staying on top of your finances. Effective budgeting is knowing where to put or channel your money instead of wondering where it went. It increases one’s consciousness of spending patterns, thus reducing unnecessary spending.
• Saving. Saving is one of the most important aspects of maintaining a healthy financial life. Without proper savings pattern, it becomes difficult to achieve certain goals in one’s life.
• Investing. In order to achieve most of your financial goals, you must understand different ways to invest your money (e.g. stocks, bonds, commodities, real estate, e.t.c)
• Debt Management. Effectively managing debt is very key to understanding the difference between good and bad debt. Knowing when not to go into debt and when to get out of debt.

The bottom line is this; financial literacy is a life-long process of expanding your financial knowledge. And knowing the basics is very important, but applying them to your own financial strategy is even more important, especially in times of economic downturn. So, by becoming financially literate; you are able to make sound financial decisions and also develop the ability to wisely grow your wealth and allocate your income towards accomplishing various goals in your life simultaneously.