Financial Literacy: Taking Your First Financial Steps
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These last few weeks and months have been an exciting time in the Frugal Rules home. Our youngest, JP, has been slowly learning how to walk. Having a five and three year old already, we’re well aware of what goes on as a child learns to walk. They start out trying to stand, then after mastering that they take the leap to trying to walk. All of our children have started out by holding on to various pieces of furniture as they walk and slowly, over time, take the brave step of going it on their own. JP has had it a little rougher as he has a big brother and sister who find it humorous to knock their little brother down, but he continues to get back up, as most children do. I was thinking about all of this knowing it’s Financial Literacy Awareness Month as well as reading my good friend Shannon’s post on the topic earlier this week and the picture of our youngest trying to walk has me thinking about how it relates to Financial Literacy.
We All Start Somewhere
Some of us come from homes that laid a great foundation in terms of finances. Now that we’re on our own, we’ve blossomed into very prudent spenders and savers. Others of us did not benefit from such a solid financial foundation, at least in terms of financial literacy, and so we make more mistakes now that we’re managing our finances ourselves. The truth is, whether or not we’d like to admit it, even those of us with the best laid financial foundations aren’t perfect and will make mistakes from time to time. Speaking personally, I made plenty of mistakes growing up, which culminated in racking up a mountain of credit card debt. Going back to the illustration of our youngest, we all have to start crawling before we walk.
I think back to a time earlier this week where JP was motoring his way around the living room walking and holding on to the furniture. He flashed his million dollar smile and then let go of the chair to take a step towards my outstretched hand. He was able to take one solid step, only to be followed up by falling flat on his face. Thankfully he avoided the dining room table leg on his way down, but he got right back up. The point is, he just did not get up and decide he was going to walk one day. He started crawling, then standing, then attempting to walk on his own. We all start out life that way and in terms of finances; the large majority of us all start small as well. Don’t allow your starting point, or even straight up fear to hold you back as you take those first steps and even as you continue to the run the race. After time, those steps will turn into financial discipline that will serve you well throughout your years.
Financial Literacy Starts With Knowing Your Habits
While our youngest has been learning how to walk our oldest, Carla, is learning to read. Truth be told, she has been doing it for a few months and is at the point now where she can sit down with a decent sized book and read it! Being able to read is not something that comes easily either. You have to learn the sounds that letters make and then slowly build sounds together to create words. She started with very simple, three-letter words and is now moving on to learn all the different rules that apply to the English language. It’s amazing to see her blaze through new, longer and more complex words each day. As I listen to my daughter read, it strikes me that financial literacy works the same way. You need to learn about yourself, how you spend money, what tempts you and finally what motivates you to save for the future. There are various methods you can use in regards to budgeting, watching your expenses or learning how to invest in the stock market and the key is to finding what works for you and what motivates you and going for it. While there are some basics which should be followed, like spending less than you earn and saving for the future, beyond that the key is learning what makes you tick financially and finding what works best for you. This all requires homework, but you don’t have to view it as a chore; instead, think of financial literacy as a way to grow yourself financially which will ultimately pay you dividends in the long run.
Never Stop Learning
Certainly, I expect that once JP gets his walking down he’ll then start running and then Mrs. Frugal Rules and I will be truly outnumbered at home. While that might be just a bit stress inducing, I look forward to it. Life is about many things, and one of those things is growing and learning. None of us know everything, though we might like to think so, and thus need to learn in order to grow. Thankfully, there are many resources to do that in regards to handling your finances. There are books, websites, magazines, and blogs that all give you the opportunity to learn more about managing your money and make wiser decisions. If you need a place to start, then I encourage you to check out my blog roll to get a good starting point towards that end. Not only will using these resources help you make wiser financial decisions today, they’ll also help make you more sensitive to spending habits, savings patterns and overall choices that’ll help you grow your financial literacy over time. The fact that we, as American consumers, carry over $2 Trillion in consumer debt shows me that as a culture, we are suffering from a lack of financial literacy and would be well served by a movement of individuals who make it their goal to learn about themselves, their spending/saving habits and ultimately how to improve them.
What kind of financial foundation did you receive? Is there one area of financial literacy you’d like to grow in over the next year?
Photo courtesy of: Nicole Schmoll