Financial education or financial literacy, is the education and understanding of multiple financial areas and topics related to managing personal finances, money, and investments.
So why are millennials so quick to avoid the topic of financial education, and why is it essential we empower ourselves with this knowledge no one is teaching us today?
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The Discipline of Saving Money
Why save now when you can save later! I’ll do it when I make more money. Let me take care of Christmas first. The list goes on when it comes to reasons as to why we cannot save money.
The discipline of saving money at an early age in life will become the most rewarding thing you can give yourself in a time much different from where you are today. So why is it so difficult to save money? I mean we’re able to purchase the latest gadgets, splurge on streaming services, and constantly eat out after all.
Financial literacy teaches us that money is nothing more but a mere tool that opens possibilities and allows us to walk through life without the financial stress most of us can’t seem to stay clear of. I grew restless of living paycheck to paycheck. It was annoying, tiring, and overall an unnecessary stress that needed to be eliminated in order for me to focus on the things that truly mattered the most.
All it took was a shift in mindset and educating myself financially. And of course, the discipline to save money.
We tend to give the dollar a little too much value; we keep it close. One thing we must learn to do is to let go of the money, but not in the manner of spending it. It must be pooled into an account where you will consistently be depositing in order to ensure you begin building a safety net.
This will be useful in case of a sudden emergency (which will occur at some point), a shift in job/career, or for a large purchase such as property.
Investing Is Easier Than You Think
A simple way to invest your hard earned money is by allowing your earnings to start working for you. Investing does not necessarily mean you have to invest in the stock market or real estate. One of the most simple ways to start your very first investment is by opening a high yielding savings account or money market account.
If you have a savings account it’s very likely your current bank is paying you 0.01% in interest a year. That’s a penny a year! They’re already investing your money so why not move your earnings to a high yielding savings account.
These bank accounts can pay up to 2.05% in interest per year. The amazing thing about these accounts is that the longer you continue to save, the more compound interest starts to reward you.
Compound interest is when interest is earned on the initial deposit, every deposit made, and on top of the interest already earned! Guys, I don’t think I’m the only one that wishes they’d known this sooner.
Rates will fluctuate from time to time but it beats leaving your money sitting in an account only to collect dust.
Read: Earn passive income with these 5 guaranteed strategies
The Path to Financial Freedom
Now that you’re consistently saving money, budgeting, and have made your very first investment, you’ve taken the initial steps towards reaching financial freedom.
Financial freedom requires self discipline, and a true desire for a financial stress-free life. By financially educating ourselves, we are able to navigate through our lives with one less thing to worry about so we can pursue and focus on the things we most value.
Take control of your life, teach this to everyone you want to see win, lets secure an amazing future, and be known as a financially educated generation.
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