Financial Literacy

Financial literacy by definition is the knowledge of budgeting, saving and investing and enabling people to make informed decisions about their personal finances.

Financial literacy is the ability to understand the use of money as it applies to your personal finances, according to the National Financial Educators Council.

It can help you make better decisions and is a key element in improving your behavior and planning when it comes to your personal finances and overall financial wellness.

The 5 Principles of Financial Literacy

There are five principles of financial literacy:

1. Earning

2. Saving and investing

3. Borrowing and managing your debt

4. Spending and planning

5. Protecting your assets

These principles of financial literacy serve as a road map for good money management and are the establishment of a solid financial foundation. Learning about them — and putting them into practice — can improve your financial situation now and in the future.