Financial literacy basics

 Financial literacy is basically having an understanding of how money works. We are not really taught how to handle money in school. Without proper understanding money can be a source of stress and turmoil in our lives. These are some of the basics you need to learn.

  1. What money is and the role it plays in society; money is a medium of exchange of value in society. As long as value is being exchanged, money is involved. Our modern life is predicated on having money to do almost everything. You can’t even move around confidently without cash in your pocket.
  2. The mindset to acquire money; There is a certain mindset one has to develop to be able to earn and keep money. This is usually the hardest part because it involves behavioral change.
  3. How to increase your earning ability; The money you earn is in direct proportion to the service you render. Focus on building your skills and helping as many people as possible get what they want.
  4. The difference between assets and liabilities; An asset puts cash in your pocket. A liability takes money out of your wallet. Aim to have more assets than liabilities.
  5. How to save; All rich people save a lot of cash. They use this cash to make more investments. And that is why the richer become richer.
  6. How to make investments; Investing is an art and a science. You can’t become rich without investing. You will need to overcome your fears of losing money to become a successful investor.
  7. How to prepare for retirement; Sooner or later we shall all retire. This calls for long term financial planning.
  8. How to prepare and keep financial records; A good financial system depends on accurate records. You need to create a system for recording and retrieving all key financial transactions.
  9. How to manage debt; It is very easy to acquire debt. Debt is a double edged sword and if wrongly used can be such a stressing problem.
  10. How to be generous with money; Money is supposed to be in constant circulation. Giving away money is the greatest joy you can receive. A mindset of generosity provides the ground to receive more blessings.

It takes some bit of work but anyone can learn how to have a peaceful relationship with money.

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