Financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.
Tips on saving and investing to pursue your financial goals
Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals. This step-by-step guide can help you develop a realistic savings plan.
1. Record your expenses
The first step in saving money is to know how much you’re spending. For one month, keep a record of everything you spend. That means every coffee, every newspaper and every snack you purchase for the entire month. Once you have your data, organize these numbers by category—for example: gas, groceries, mortgage and so on—and get the total amount for each.
2. Make a budget
Now that you have a good idea of what you spend in a month, you can build a budget to plan your spending, limit over-spending and make sure that you put money away in an emergency savings fund. Remember to include expenses that happen regularly, but not every month, like car maintenance check-ups.
3. Plan on saving money
Taking into consideration your monthly expenses and earnings, create a savings category within your budget and try to make it at least 10-15 percent of your net income. If your expenses won't let you save that much, it might be time to cut back. Look for non-essentials that you can spend less on—for example: entertainment and dining out—before thinking about saving money on essentials such as your vehicle or home.
4. Set savings goals
Setting savings goals makes it much easier to get started. Begin by deciding how long it will take to reach each goal. Some short-term goals (which can usually take 1-3 years) include:
• Starting an emergency fund to cover 6 months to a year of living expenses (in case of job loss or other emergencies)
• Saving money for a vacation
• Saving to buy a new car
Long-term savings goals are often several years or even decades away and can include:
• Saving for retirement
• Putting money away for your child's college education
• Saving for a down payment on a house or to remodel your current home
5. Decide on your priorities
Different people have different priorities when it comes to saving money, so it makes sense to decide which savings goals are most important to you. Part of this process is deciding how long you can wait to save up for a goal and how much you want to put away each month to help you reach it. As you do this for all your goals, order them by priority and set money aside accordingly in your monthly budget. Remember that setting priorities means making choices. If you want to focus on saving for retirement, some other goals might have to take a back seat while you make sure you're hitting your top targets.
6. Make saving money easier with automatic transfers
Automatic transfers to your savings account can make saving money much easier. By moving money out of your checking account, you'll be less likely to spend money you wanted to use for savings. There are many options for setting up transfers. You choose how often you want to transfer money and which accounts you want to use for the transfers. You can even split your direct deposit between your checking and savings accounts to contribute to your savings with each paycheck. Thinking of saving as a regular expense is a great way to keep on target with your savings goals.

7. Watch your savings grow
Check your progress every month. Not only will this help you stick to your personal savings plan, but it also helps you identify and fix problems quickly. With these simple ways to save money, it may even inspire you to save more and hit your goals faster.
10 Benefits of Budgeting Your Money

Budgeting is the most basic and the most effective tool for managing your money. Yet, most people avoid doing it because it is additional work, much like cutting your lawn or fixing the roof. Budgeting also connotes that you have to give up and stop yourself from enjoying stuff.
What budgeting actually does is clearly show you how you allocate your money and present you the choices on what stuff to enjoy – based on your financial limitations. It will save you the grief of overspending and being too much in debt. Budgeting does not stop you from enjoying stuff, it ensures that you enjoy stuff when you want it.
Although budgeting is indeed more work, it pays off with many life-enhancing benefits:

Benefits of Budgeting
1. Gives you control over your money – A budget is a way of being intentional about the way you spend and save your money. It is said that with budgeting, you control your money and not your money controls you. Budgeting saves you the stress of suddenly having to adjust to lack of funds because you did not initially plan how to spend them. It also helps you decide if you want to sacrifice short term spending like buying coffee everyday in exchange for a long term benefit like a cruise vacation or a new HDTV.
2. Keeps you focused on your money goals – You avoid spending unnecessarily on items and services that do not contribute to attaining your financial goals. If you are working with limited resources, budgeting makes it easier to make ends meet.
3. Makes you aware what is going on with your money – With budgeting, you are clear on what money is coming in, how fast it goes out, and where it is going to. Budgeting saves you from wondering every end of the month where your money went. A budget enables you to know what you can afford, take advantage of buying and investing opportunities, and plan how to lower your debt. It also tells you what is important to you based on how you allocate your funds, how your money is working for you, and how far you are towards reaching your financial goals.
4 Helps you organize your spending and savings – By dividing your money into categories of expenditures and savings, a budget makes you aware which category of expenditure takes which portion of your money. That way, it is easy for you to make adjustments. Budget also serves as a reference for organizing your bills, receipts, and financial statements. When all of your financial transactions are organized for tax time or creditor questions, you save time and effort.
5. Makes you decide in advance how your money will work for you.
6. Enables you to save for expected and unexpected costs – Budgeting allows you to plan to set aside money for emergency costs.
7 Enables you to communicate with your significant others about money – If you share your money with your spouse, family, or anyone, a budget can communicate how you use money as a group. This promotes teamwork on working for common financial goals and prevents conflict on how money is used. Creating a budget in tandem with your spouse will avoid conflicts and resolve personal differences on how your money is spent. Budgeting teaches family members spending responsibility and accountability.
8. Provides you with an early warning for potential problems – When you budget and take a “big picture” view, you will see potential money problems in advance, and be able to make adjustments before the problem appears.
9. Helps you determine if you can take debt and how much – Taking debt is not necessarily a bad thing if the debt is necessary or you can afford it. Budgeting shows you how much a debt load you can realistically take without being stressed or if taking the debt load is worth it.
10. Enables you to produce extra money – In budgeting, you get to identify and eliminate unnecessary spending like late fees, penalties and interests. These seemingly small saving can add up over time.
Who Should Budget
You should be budgeting if you are:
• working on limited money.
• trying to lighten your debt load and solve your debt problem.
• working towards a financial goal
• planning to retire early
• trying to make the best use of your money
Budgeting has one big drawback. For it to work, you have to consciously. It does not really save you from bad spending habits. It only gives you a goal and reference to help you stay focused.

Great post.

Financial literacy will make anyone...including any idiott by the roadside rich

What is needed is the focus and determination to stick to saving and budgeting.

cc seun
lalasticlala

thank you.