Why Being Financially Literate Is So Important in 2020

The phrase financial literacy has been a key topic of many articles and blogs, with the actual approach being so vastly different. Is it as simple as being in tune with the current times in our economy? How can we manage finances while dealing with a pandemic? Does it encompass what we unlearn, introduce or reinforce in our adult years? No matter what your specific definition may be, we can all agree on how necessary it is to learn, apply and readjust financial ideals through each season we face in our lives. Remember – as it relates to finances, there’s not a level of complete mastery. Whether you’re a novice, consider yourself the ultimate expert or falling somewhere in between the two – we’ll discuss the importance of finances this year and beyond.

Enjoy life and worry less

When most people ponder about the things that cause them the most stress and anxiety – one of the top reasons typically includes the hot topic of money. It doesn’t necessarily mean there’s a lack, but many do feel the pressures of the ‘what ifs’. What if something happens? I don’t believe I’ll have enough money to cover that and stay afloat. What if I were to lose my job during COVID-19? That would wipe out my savings. Having a handle of your personal finances, identifying what may need some work, and also highlighting what you do well all play a huge part in your financial journey. Stressed about the current global chaos? The first thing (and the best thing) we can all do is understand this – the pandemic will indeed pass and you will recover!

Given we’ve had to shift our day-to-day routines as we know it, use this time to incorporate something that relaxes you in your spare time. This could be a home workout, a nice bubble bath, or curling up with your favorite book. Since time is currently on our side more than ever, complete this quick exercise. Sit for a few minutes with your eyes closed. Think about what an ideal life would look like and feel for you. Be specific! Envision, speak, and write down those pieces of the puzzle that could make that a reality for you. What’s your homework? Work toward that!

Life isn’t all about the busyness of what needs to get done or events we have to participate in. It’s about achieving a level of interrupted peace no matter the current climate of the economy. If this is something you desire in other areas of your life, your finances certainly don’t have to be an exception. The motto we should all live by is: simplify the problems while multiplying the money. When you are in the headspace of not being concerned about money – you’re able to truly focus on the other things that matter. Maximize your profits and minimize your stress; this is very achievable. 

Prepare now; reap later

Let’s be honest – some of us shy away from doing the hard things. The stuff that requires us to sacrifice a bit more than we’d like, the things that push us outside of our comfort zone. Since we live in such a fast-paced, right now world – we tend to believe our finances should also follow suit. If the pandemic has taught us anything, it has shown us the importance of making smart money choices. The real test of resiliency isn’t in completing the things you enjoy; it truly lies in doing what you don’t want to do and doing it anyway with excellence. The work we all put in now (which doesn’t have an age limit) allows us to reap the harvest of our sowing season.

For example, if you’re paying on a student loan that seems as if the balance isn’t moving an inch – but you are making consistent payments each and every month. Eventually, there will be a zero-balance based on your dedication and commitment. In the grand scheme of things, saying no to a few events when we’re allowed to move freely again, or passing up on the latest sales that have been hitting your e-mail will result in you being able to do the things you once had to decline.

Build a foundation for generational wealth

Each generation has a responsibility of making sure the struggles you may have experienced shouldn’t be the ones that your kids should tackle too, financially. Many people think generational wealth only encompasses a surplus of money (which shouldn’t be disregarded) – however, money management is as equally as important. Teaching your children, friends, and family members about the value of money is golden. There’s a common saying that ‘money isn’t everything’, but it is an imperative tool that provides access to everything. Think about the level of frustration you may have had in your younger years due to higher interest rates or less than desirable options. How would that make you feel? Leave behind the knowledge and foundation you and your children would be proud of. Think about this – how would you like to emerge from this pandemic? Set the tone now to better your future for those behind you. 

Serve as an inspiration for yourself and others

Inspiration can come in many forms and who’s better than you to be proud of your progress? Celebrities and athletes tend to be the inspiration for many, but there’s no reason why someone you personally know can’t be the center of inspiration for you! Accomplishments big or small should be celebrated. There’s nothing more fulfilling than sharing your knowledge so that others can advance within their personal finance journey. You never know who is admiring you and your progress – keep going!

Achieve financial freedom

Imagine a life full of the things that are most sacred to you. For some, it can simply be no debt or having a minimal, controlled amount. Not having to live paycheck to paycheck or not having to work every single waking day of your life are also things that many consider valuable. Managing recurring expenses while being able to healthily save is the ideal state for some as well.

No matter what your definition may be, a life with no stress or concern regarding money, savings or retirement is the true meaning of financial freedom. Whatever happens during this time does not define the course of your life or your finances. If you have to postpone some minor milestones, don’t worry. Utilize any of the pandemic relief benefits to your advantage. If the goal is to catch up on bills first, focus on that initially before tackling other time-intensive things.

Stability allows you to weather the storm of life

Life hardships are inevitable. Jobs will have layoffs, stock markets can (and will) tank and loved ones could need your assistance financially. Unfortunately, there’s no end to the not-so-good things that can happen to us all. On the flip side, what has the ability to put us at ease is the capacity to recover.

Stability isn’t only a mindset, it’s a life lesson that allows us the freedom to ride the ebbs and flows of life. We can’t control what happens in life – but we are able to lessen the blow based on our power to achieve stability.