Why Your Financial Literacy Matters

It’s good when you decide that you need professional assistance to manage your personal finances, but do you really want to be left in the dark about exactly what they are doing and why, because you don’t understand finances?

Professional financial advisors have an abundance of knowledge and will likely work diligently to protect your interests; but understanding why they make the decisions they make on your behalf is also important.

Now more than ever, financial literacy is available for everyone and is crucial for understanding personal finance,  investing and more generally, money management. This means understanding the financial and investing terms that are relevant to your financial well-being. It also means learning important skills required for your personal financial success.

There are four skills you need to be financially secure:

  1. How to create a budget – If you can’t adequately budget your money, you cannot control its flow in and out of your pocket. You need to know how to track what money is coming in and how to allocate it for the best financial results based on your needs. If retirement is your destination, then a budget is like a roadmap to help you get there.
  2. Track Spending – Money coming in is a resource. Correctly allocating those resources  in order to derive the most optimal returns is the goal. But you need to track the money you are spending accurately in order to keep it under control.
  3. Pay Off Debt: Once you have a budget and you are tracking all spending, then you can focus on paying off any debt you may have accumulated. You won’t be able to pay off your debt only when you think of it. You need a plan. In order to have a debt repayment plan you need to know what money you have available.
  4. Plan for Retirement: Once you have your personal finances in order; built a budget, tracked your spending and paid off debt, then you can start planning for your retirement. It’s the final item on this list but perhaps the most important for a successful wealth management plan. If you wish to maintain the standard of living you’ve grown accustomed to while working full time, during retirement, you will need an effective and customized plan.

 

Fortunately, Eagle West Group offers Financial Literacy 101. Financial Literacy 101 is a service of Decision Partners. Through this tool we provide financial literacy programs to leading colleges and universities. From understanding financial aid to managing credit, Financial Literacy 101 offers financial education you can trust.

If you would like to know more, visit our Financial Literacy 101 page.

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Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Elevate and Eagle West are not affiliated with Cambridge.

This communication is strictly intended for individuals residing in the states of AK, AZ, CA , CO, FL, GA, HI, ID, MD, MI, MN, MO, MT, NV, NY, OR, TX, UT, VA, and WA.
No offers may be made or accepted from any resident outside the specific states referenced.

This represents a partial list of clients. They have not been compensated and were not selected based on duration, performance, account size.