April is recognized as Financial Literacy Month – a national holiday in the U.S. that showcases the importance of being financially literate. The purpose of this holiday is to not only spread awareness of financial literacy but also educate people, especially younger generations, on the importance of becoming financially literate.
While Financial Literacy Month may only be celebrated once a year, its mission should be carried out throughout the year. Arming people with the knowledge and tools for financial well-being can help create a better tomorrow for everyone.
Understanding Financial Literacy
Being financially literate means using financial literacy skills to properly manage finances. Financial literacy is important for a variety of reasons, but most importantly, it equips individuals with the understanding of how to budget their personal finances and invest their money. Good financial literacy skills can help people properly manage their money while not taking on more debt than they can afford.
In addition, skills obtained through understanding financial literacy can help individuals learn how to best place their excess money into emergency funds for themselves and their families if trouble arises. According to a study conducted by Bankrate, 56% of Americans would not be able to cover an unexpected bill of $1,000 with their savings.
How to Become More Financially Literate
There are many steps to take to become more financially literate. While there are a variety of tools and resources out there that can help one get started on their financial literacy journey, here are some ways you can become more financially literate:
- Learn how to budget your money: The first step in becoming financially literate is understanding how to budget your money effectively. This means taking into account how much money you bring in every month and what your total expenses are for the month. It is important that you have enough money to cover all of your expenses without having to go into debt.
- Understand the basics of investing: Investing might seem daunting to some, but there are many online resources to help one get started. Being able to invest any extra money you have each month can help secure your future and generate additional income for you and your family.
- Open a savings account: Opening a savings account is important in case something happens in the future. Whether it is an emergency or a family vacation, having a savings account will help set this money aside for you.
- Establish an emergency fund: Establishing an emergency fund is critical for everyone. Life happens, and you never know when something can come your way that might affect your financial situation. Having an emergency fund set up will help alleviate some of the stress when this occurs and also keep you from accumulating debt just to pay for your cost of living.
Robert F. Smith and Improving Financial Literacy
Improving financial literacy among the American population, especially with children and those from underserved communities, is of the utmost importance to Robert F. Smith. In fact, he supports the idea that everyone should be able to establish financial freedom in their lives. He champions programs that provide youth with the tools they need to become financially literate adults. Smith supports organizations such as Goalsetter, the first Black-owned investment app that is designed to help educate children on financial literacy. In addition, Smith and Vista Equity Partners support Girls Who Invest, an organization dedicated to helping young women enter the finance and investment space.
Stay up to date with Smith’s latest philanthropic ventures, including his quest to improve financial literacy, by following him on LinkedIn.
