The Importance of Ongoing Financial Education

Do you think you have a basic understanding of everyday financial concepts like budgeting, managing debt and planning for retirement?

If the answer is no, you’re not alone.

The majority of Americans wish they had better financial literacy, according to a recent survey by Charles Schwab.¹ When asked what they would teach their younger selves based on what they know today, respondents listed the value of saving money (59%), basic money management (52%) and how to set and achieve financial goals (51%) at the top.¹

That’s why it’s important to take steps today to improve your financial education, so you can make smart decisions about your money both now and in the future.

What is financial literacy and why is it important?

Financial literacy is understanding financial concepts in a way that leads to making informed decisions about money. Being financially savvy helps you manage your money, debt and savings better — which can help you achieve your financial goals faster.

The 4 basics of financial literacy

Maintaining healthy financial habits now is the key to a brighter long-term financial outlook. That means being proactive (not reactive) about managing your finances and taking an ongoing approach to your financial literacy.

Understanding these four fundamentals of financial success can give you a solid start on your journey:

1. Managing your expenses – This starts with creating a household budget. A budget is a valuable tool to help give you a big picture view of your finances so you can set priorities for spending. It also teaches you to use money as a tool to achieve the things that are important to you.

2. Dealing with debt – Understanding how to handle debt correctly — and how to use it to your favor — can help you make better financial decisions. If you’re struggling with debt, OneMain offers a number of free resources including articles and printable booklets and worksheets that can help you get a full picture of your debt and make plan to manage it properly.

3. Building credit – Your credit impacts everything from car loan interest rates to your ability to rent or purchase a home. That’s why it’s essential to build your credit and maintain it.

4. Saving money – Understand why saving is important, determine what you’re saving for and research the best way for you to start saving. Remember, you don’t need to make a lot of money to save money. Small changes in your monthly spending could free up more money to put towards your savings.

You’ve got resources

Becoming savvy about all of these topics won’t happen overnight. Take an ongoing approach to your financial literacy, and make good use of the many resources and tools available to help you along the way.

Here are three ways to keep yourself financially literate:

1. Stay up to date on articles and blogs on financial management. Pick up a book or listen to a podcast by a trusted finance expert. Stay up-to-date with what’s happening in the world and pay attention to any news that could have an impact on your finances.

2. Take a course, seminar or workshop on financial literacy. You’d be surprised at how many free courses are available at local colleges, libraries, community centers and nonprofit organizations.

3. Get advice from an experienced financial professional.

It’s never too late to improve your financial literacy

As long as you’re willing to learn and are committed to practicing good financial habits, it’s never too late to start. Consider today the perfect opportunity to jumpstart your financial education. Start by gaining a firm understanding of the ins and outs of basic finance — and continue to educate yourself so you can make the decisions that lead to a healthier, more confident financial future.

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*This article has been updated from its original posting on August 12, 2020.