Why Financial Literacy Is Important

First & foremost welcome to my blog, Money Buffalo, with the primary focus of helping you be financially successful & enjoy a debt-free lifestyle.  The first topic I wish to cover is: “Why Financial Literacy Is Important”

In the 21st century, wealth is most commonly measured in the amount of money a person has and people expect to be paid in money accordingly.  So to better understand personal finance, we must begin with the concept of Financial Literacy.

Wikipedia defines financial literacy as “the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others.”

I will flesh this concept out in future posts, but for now you are probably scratching your head & trying to make sense of the term “Financial Literacy.”  Don’t overthink it.  In simple terms, we work to get paid in dollars  so we can buy things like televisions, houses, and food with dollars.  We pay our taxes & get refunds with dollars.  You become a millionaire when you have at least 1,000,000 dollars in the bank. Understand?

Everybody is competing for your dollar in exchange for goods (like furniture or automobiles) or services (like insurance or lawn care).  We make decisions each day to spend or save money & hopefully every financial decision has been made responsibly.  Unfortunately, 99% of us have had to borrow money (i.e. go in debt) at some point in time whether it be student loans, car payment, or a mortgage.  Some debts are unavoidable like housing (shelter) or student loans to provide better career opportunities in the future.  Some debts become so large that it seems easier to climb Mt. Everest.

Financial Literacy is what motivated me to create this blog.  I want to share my story and offer guidance to how life isn’t necessarily better always having the latest toy or the finest clothes.  It can be real easy to make a few purchases & it quickly snowballs into a situation where your entire paycheck goes straight to the loan payment service instead of your bank account.  An anonymous quote I read once”Live Below, Not Within, Your Means” . In simple terms, spend less than you earn.

Until Next Time,

Josh

 

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