On this week’s episode of the podcast, we had Jason Vitug from The Road to Financial Wellness on to discuss the importance of financial literacy.
If you’re not in the personal finance community, you might not understand why this is so important, but it’s a cause we all feel passionate about.
In fact, it’s most of the reason we all decided to start blogging about personal finance!
Financial literacy may sound like a boring concept, but it can have a profound impact on your life by empowering you to live the life you want to live, in congruence with your values.
So with that said, we wanted to take a moment to share with you what kind of impact becoming financially literate has had on us, and why we think it’s so important for everyone to educate themselves.
Financial Literacy Provides Context For Your Life
Whenever I tell people “in real life” that I’m a personal finance writer, they tend to tune out rather quickly, which is a shame.
I get that personal finance can be a dry topic, but it doesn’t have to be.
To be completely honest, I treasure my ability to manage my money well. It’s one of my best skills and I wouldn’t trade for the world. It makes that much of a difference.
Becoming financially literate in my early 20s was one of the best things I did for myself, and I don’t regret a second of it, because it has provided me with a context, or a framework, with which to live my life.
If you’ve listened to a few of our episodes, you know that I’m a huge believer in living – and spending – according to your values. I’ve designed my life this way because it’s one of the few ways I can be happy about spending my money.
Truthfully, I haven’t had the healthiest relationship with my money. Growing up with parents who were in debt and lived in fear of emergencies (that they couldn’t afford) happening, I tend to hoard my money to prepare for the worst-case scenarios.
But saving out of fear is NOT a good way to manage money. Neither is depriving yourself because you feel guilty about spending.
So I turned to value-based spending and vowed to spend as little as possible on everything else that was inconsequential to the big picture.
I have a much healthier relationship with my money now that I can spend guilt-free on the things that matter most to me, and guess what? It wouldn’t have happened if I hadn’t been reading financial blogs that supported this framework.
I believe financial literacy is important for everyone because so many people don’t realize this key to living a happier life. They get caught in the paycheck cycle, feeling trapped in their jobs, all to afford a lifestyle typically curated by the Joneses, and it doesn’t have to be that way.
Financial Literacy Gives Me Peace of Mind
Although I still have debt to payoff and my savings aren’t where I really want them to be right now, I know that I am so much farther ahead (financially) than I was a couple of years ago.
Before I started my blog, I was in debt over my head, I had no budget, and I had no idea where my money was going every month. The only thing I did know about my finances was that I had to get very creative in order to keep my bank account from going negative every single day.
Back then, I could sleep because I was so stressed about money.
Learning about financial literacy has changed my entire life and even though I still have a long way to go to get to where I really want to be (financially), I have peace of mind. My budget gives me peace of mind because I know how much I’m earning, how much I’m spending, and what I’m spending it on. Without financial literacy, I wouldn’t be where I am today and I definitely couldn’t have quit my job to freelance full-time.
Financial Literacy Helps you Avoid Common Money Mistakes
Being financial literate can help you avoid a lot of common and uncommon money mistakes. Growing up, I saw many adults I knew make mistakes with their money like failing to pay off debt, wasting money on depreciating ‘assets’ misusing credit cards and so on. I’m definitely not the type of person that wants to learn things the hard way so I became curious about avoiding those mistakes. I started reading personal finance blogs in college along with other resources in order to become more financially literate so I didn’t make those same mistakes.
While I still made many mistakes out of ignorance, I realize my situation could be a lot worse than it is now. I’m thankful that I took the time to become financially literate in my 20s so I can take advantage of investing and saving early and paying off my debt as quickly as I can so I can enjoy debt free life when I get older.
I’m also excited to share everything I’ve learned about money with my son when he gets older so he can become financially literate too and avoid some of the mistakes I’ve made.
How do you think financial literacy can attribute to your success?