Education on Financial Matters
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Most people know very little about finance. The education system offers only very rudimentary coverage of the subject in school. Children and young adults come out of the schools having being bombarded with advertising to buy consumer goods. If they have this, that or the other they will be cool and thus one of the gang. These ”goodies” have to be paid for and once they are welcomed into the arms of the credit industry that is eager to lend at high interest rates, the damage has been done. Those people who tend to be less educated tend to be poorer and they are the ones that make the bad choices. To overcome the problem all of us need to take responsibility in becoming better financially educated.
How
Financial education has nothing to do with usual levels of education. To be financially “savvy” you simply need to wake up and pay attention. Start reading articles in the press about money and money management. Look at the Internet, search for information. Slowly a picture or a number of pictures will begin to emerge.
Don’t be Afraid
The nice lady comes up to you in the shopping mall and tries to interest you in signing up for a new credit card. Ask her lots of questions before you sign anything. The same applies to the Bank. When your statement comes look through it carefully. Reconcile it with your check register. When the bank contacts you or sends you information, don’t throw it way. Look at it carefully and if you don’t understand be sure to ask any questions you may have.
Eliminate Credit Card Debt
The most expensive way to pay for anything is to put it on your credit card and then pay it off slowly by way of monthly payments. Examine your credit card statements and see how much interest you are really paying. An APR of 16% tells you that the amount of annualized compound interest you are paying is 16%. Go down to your bank and inquire how much interest you are liable to pay on a loan? Is there a difference? It’s by following simple little steps like this that we begin to learn.
Start Saving
Stop spending and start saving. It is a good discipline that will teach you about the other side of the coin. The method of moving from poverty consciousness to wealth awareness.
Always Look to the Bottom Line
It is comparatively easy to buy goods on credit. You decide whether or not you can afford the consumer durable dependant on the monthly payment. That is not the way to go shopping. Instead do the sums and calculate how much the’ gizmo’ is really going to cost you when you have finished paying for it. This is how you go about educating yourself in financial matters.
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