Financial literacy refers to the knowledge and skills needed to make informed and effective decisions about managing personal finances. It encompasses a wide range of financial concepts, including budgeting, saving, investing, debt management, credit use, insurance, and retirement planning. Being financially literate means understanding how money works and applying that understanding to build financial security and achieve long-term financial goals.
In today’s complex economic environment, financial literacy is more important than ever. It empowers individuals to make sound financial decisions, avoid common financial pitfalls, and respond confidently to financial challenges such as inflation, loans, and unexpected expenses. A financially literate person is more likely to budget wisely, build savings, use credit responsibly, and plan for the future, including education, homeownership, or retirement.
Financial literacy is not only crucial for individuals but also for communities and nations, as it contributes to economic stability and growth. Educational programs and short courses in financial literacy aim to equip people with practical tools and real-life strategies for managing money, increasing financial well-being, and reducing financial stress.
