Financial Literacy: Things you Need to Know About Money

Many People are too focused on how to get money but most do not have the Financial Education on how to spend it,which is supposed to be their greatest wealth.

What is missing is not how to make money,But how to spend money,What to do after making money,What you do with the money once you make it,How to keep it from going to liabilities,How long you keep it,How much that money brings in.

Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.

If you really wish to be financially literate, the number one principle you need is to:

◼ know the difference between an Asset and a liability.

Asset can be in form of your money working to bring another money for you,Liability can be in form of things that you spend on but they reduce in monetary values once you buy them.Assets puts money in your pocket,Liabilities takes it out.

Flow pattern of how you should Spend your money

Income ➡ Expenses ➡ Assets ➡ Income ➡to whatever you want.

but keep the pattern

Buy more of assets,you can buy liabilities from the money your assets is producing

◾Watch the way you spend:

If your pattern is to spend Everything you get,most likely an increase in cash will result in an increase in spending

◾Earn more than you spend: 

This helps you to stay debt-free as you'll have no reason to borrow from anyone when you have enough to spend before another payday.

◾Know the Difference Between Wealth and Net worth:

Wealth is the Abundance of valuable financial assets,It measures how much money your money is making.

Net worth is the difference between your assets and liabilities,the current value of everything you have.

◾Invest;Diversify your investment

When you make and save money, you need to invest it in one business or the other to watch your money grow. But when you are investing, make sure all your eggs are not put in one basket.

If you put your money in one business, you'll likely face a greater risk of losses if the business faces hard times. This is why you should always Diversify your investment.

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www.tcodeinvestment.com
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◾Save for your future

In the long run,its not how much you've made, but how much you keep and how many generations you keep it for,Saving for the future is one of the best financial decisions anyone can take and this does not mean you should deny yourself basic life enjoyment because you want to save for the raining days.

There are tested and trusted saving platforms like cowrywise,Piggvest e.t.c

Enjoy life now but also be sure your hard work and diligence are aimed at securing your future.

Read Also:Tips that will Help You To Achieve Your Goals This New Year

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