9 Tips To Improve Financial Literacy

Improving your financial literacy is a process. Get started by taking these steps to get better with money and improve your personal finances.

Financial literacy is having the skills and understanding of saving, investing, and managing your debt to improve your financial health. You can improve your financial literacy in several ways, but the most important thing is building a solid foundation of better money habits. Here are a few tips to improve your financial literacy.

1. Read Newsletters

Many companies create financial newsletters to help potential customers understand the basic skills they need to manage their finances. Search for blogs or organizations specializing in personal finance and subscribe to their newsletters, which can provide tips and tricks you need to save money or invest.

2. Read Books

One of the easiest ways to improve your financial literacy is to read about different financial topics, including mortgages, personal loans, money management, investing and saving. There’s a book for everything you need to learn to improve your financial literacy, but if you don’t know where to start, you can go to your local library and scan their selection.

When looking for a personal finance book, consider your goals. For example, if you want to pay off debt, look for a book with different debt repayment strategies. Meanwhile, if you want to learn simple ways to invest your money, you can purchase a book on stocks, CDs and bonds.

3. Listen to Podcasts

You may not have time to read every newsletter you get, but you can always find time to listen to a podcast. Personal finance podcasts are an excellent way to improve your financial literacy and learn tricks of the trade while doing other things like commuting to work or running errands.

4. Visit Personal Finance Sites

Books are always a great resource, but sometimes you may run across one that’s a little dated at your local library. You can ensure you’re getting the most relevant, up-to-date information about personal finance by visiting personal finance sites that allow you to read articles about loans, banks, credit unions and money habits.

Hundreds of thousands of articles are out there, but always choose ones on a trustworthy financial website. Of course, many bloggers also have great tips and tricks for the average person, but you want to follow the advice of personal finance experts.

5. Use the Right Tools

Managing your money can be difficult, especially if you have different accounts and credit cards at various banks. Tools like money management apps that show you how much money you’re bringing in versus making across all of your bank accounts can help you learn more about your spending habits.

The more often you use the app, the more savings you can find by looking at your spending. You never know what types of subscriptions you’ve been wasting money on, so use an app to help you find the best ways to save money and understand your everyday financial habits.

6. Talk to an Advisor

Sometimes, you need to talk to a professional to help you understand your current financial situation and give you advice based on your circumstances. Everyone’s financial situation is different, but advisors can help you find the best solutions for improving your financial health. A financial advisor can help you determine the best way to pay off debt, open a retirement account, and invest your money.

Financial advisors are great resources when you have a complicated money issue. While reading books and websites can help you learn a lot, they’re not designed to help your specific situation. Meanwhile, an advisor will learn everything about your finances to help you make better decisions.

7. Take a Course

Taking a personal finance course at your local community college or online can help you learn more ways to improve your financial health. Many of these resources aim to improve your understanding of different aspects of finance, whether saving money or paying down debt. Depending on your needs, you may also be able to find a course targeted for your unique situation. For example, you can find a course on investing in stocks or saving for retirement.

8. Set Goals

You can’t reach your financial goals if you never set them. Everyone should have short-term financial goals they work towards daily and long-term goals that help them make better decisions with their money. Short-term goals could be anything from saving a specific amount of money from each paycheck or paying down one credit card before moving on to another. Meanwhile, a long-term goal may be saving for a big financial purchase or paying off a significant debt like your student loans.

9. Understand What You’re Getting Yourself Into

If you really want to have better spending habits, you must understand what you’re getting into when you take out a loan or get a new credit card. You must also understand the types of fees you can expect, such as late fees or loan origination fees.

Always understand what you’re getting into when taking out a line of credit or a loan because it can impact your financial health. Everything from a credit card you only use for gas to a personal loan to pay for home repairs puts you further into debt.

Final Thoughts

Improving your financial literacy is a process. Not everyone initially has great money management skills because they must be learned over time and through experience. By taking every opportunity you have to learn about personal finance, you can improve your financial literacy and start putting it into practice. Of course, you may make a few mistakes along the way, but eventually, you can manage your money more effectively.

Related:

• 3 Questions To Test Your Financial Literacy
• 10 Signs a Lack of Financial Literacy Could Be Costing You Money
• A Guide to Avoiding the High Cost of Financial Illiteracy

Reviewed March 2024

About the Author

Ashley Nielsen earned a B.S. degree in Business Administration Marketing at Point Loma Nazarene University. She is a freelance writer where she shares knowledge about general business, marketing, lifestyle, wellness or financial tips. During her free time she enjoys being outside, staying active, reading a book, or diving deep into her favorite music.