Financial literacy is the possession of skills that allows people to make smart decisions with their money. Although understanding stats and facts about money is great, no one has truly grasped financial literacy until they can regularly do the right things with money that lead to the right financial outcomes. When you have this skill set, you’re able to understand the major financial issues most people face: emergencies, debts, investments, and beyond.
Financially literate people know their way around a budget, know how to use sinking funds, and know the difference between a 401(k) and a 529 plan. Here are just a few of the concepts financially literate consumers have mastered:
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