Practical Tips & Tools

Financial Literacy

What is Financial Literacy?

April 25, 2022

It’s Financial Literacy Month. Financial literacy includes skills in money management, budgeting, and investing.  

People with high financial literacy are better able to cope with emergencies and unplanned expenses and are at lower risk of predatory lending. 

If you’re new to financial literacy, focus on these topics first. 


The ability to borrow money when you need it is important for creating financial flexibility, but too much debt can have a serious impact on your life. 

If you owe an uncomfortable amount, don’t be afraid to ask for help. Many nonprofits offer free or low-cost debt counseling. Once you’ve committed to pay down debt, research and write down your plan.  

There’s lots of advice out there on how to tackle debt. Clever Girl Finance and Dave Ramsey’s The Total Money Makeover are both popular. 


First, write down exactly how much you spend, where you spend it, and what you buy. 

Once you know where your money is going, you can decide if you want to make changes. When it’s time to make your budget, write down the big things you pay every month like rent, utilities, loans, and food. Next, add in variable expenses like haircuts, family movie night, car maintenance, etc. 

Compare your spending against your budget every month. Your budget is a tool, but monitoring it is a habit to practice. 


If you have money left over in your monthly budget, it’s a good idea to create an emergency fund. 

You can save fast or slow, but the best time to start is now! Saving $2 a day gets you $730 a year! Once you have about $1,000 in savings, you’re ready for an emergency.  

Here are some ways you can find money for savings: lower spending, pay off debts, add income (get a raise, new job, moonlighting), tax credits 


Once you have an emergency fund you can put more focus on saving for retirement. 

There are special accounts such as IRAs and 401(k)s available for retirement savings. If you work for a company, find out what type of plans they offer. Employers often match a percentage of the money you contribute through their retirement programs.  

Financial literacy isn’t always easy to learn, but it can reduce stress and help us live more comfortable lives. 


ProLiteracy offers the Understanding Finance and Money course free on Education Network.

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