Build a solid foundation in financial literacy to make informed financial decisions. Learn 10 vital principles to broaden your financial know-how and secure your financial future
Introduction
Allocate income to various expenses like housing, food, savings, and leisure. A well-designed budget helps control spending and achieve financial goals.
Budgeting
Consistently reserve a part of your income for emergencies, short-term goals, or long-term security. Develop robust savings habits to avoid debt and attain financial freedom
Saving
Allocate resources to assets like stocks, bonds, or real estate, expecting returns in the future. Investments help accomplish long-term financial aims and protect against inflation
Investing
A credit score, based on credit history, represents your creditworthiness. A high credit score allows you to qualify for better interest rates on loans and credit card
Credit Score
Manage debt effectively by using credit wisely and prioritizing high-interest debt repayment. Distinguish between good and bad debt to maintain financial health
Debt Management
An emergency fund covers unforeseen costs like job loss or medical bills. Save three to six months of living expenses to provide a financial safety net
Emergency Fund
Compound interest includes interest earned on the principal and accumulated interest. Start saving and investing early for exponential financial growth
Compound Interest
Invest in a variety of assets to reduce overall risk. Diversify your investments to minimize the impact of underperforming assets on your portfolio
Diversification
Inflation represents the rate at which average prices for goods and services rise. Invest in assets that outpace inflation to protect your purchasing power
Inflation
Financial literacy enables well-informed financial decision-making. Grasp these 10 key principles to control your financial destiny and achieve your goals. Keep learning and seeking professional advice to strengthen your financial foundation.