When it comes to money matters, many people lack the basic knowledge needed to handle their finances properly. The National Financial Educators Council conducts an annual survey on financial literacy.
They asked American adults how much money they lost in 2019 because of financial illiteracy. The average respondent lost about $1,300. Moreover, 17% of respondents reported losing over $2,500.
And these are just the amounts they are willing to admit losing. When it comes to knowledge of financial basics among Gen Zers, the situation is especially worrisome. They show less knowledge than other generations.
This in no way means knowledge of financial issues gets better with age, or when you start your business. It’s something you should keep in mind when you’re borrowing or splurging large funds. It will motivate you to think things through.
It’s never too late to enroll in a financial course or seminar. Taking part in a financial workshop can help you learn how to lower your banking fees, maximize profits, and interpret financial data.
When applying for a credit card or making a big purchase, it’s important to read the fine print. But, more importantly, you must know what to make of it.
If you can’t explain to someone else why you made a certain financial decision, what are its pros and cons, how you benefit from it, and how the financial instrument works, then you are making a mistake.
You must know all the aspects of your financial decision. And, you can rest assured that every financial decision, product, or instrument, has a bad side to it. If you can’t recognize it, it’s time to educate yourself.