How Can I Increase My Financial Literacy?

If you've been keeping up with my blogs then you already know I love a good themed month. April is no different, and I wish you all a Happy Financial Literacy Month!

Financial literacy is a particular passion of mine; for years prior to becoming a financial planner and CFP® practitioner, I served low- to moderate-income households in San Diego and advocated for universal financial literacy and self-sufficiency. I created a comprehensive financial literacy resource guide for my clients and trained my colleagues on how to teach their clients. Because the fact of the matter is: everyone who has a dollar and earns a dollar needs and deserves quality financial education.

Financial literacy is a topic I get asked about plenty today, naturally. Spanning generations, incomes, net worths, and backgrounds, folks share concerns with me about their personal level of financial literacy and ask how to do better with the basics. I frankly have similar financial literacy conversations with five-figure earners early in their careers as well as with multi-millionaire F.I.R.E. aspirers who have been winging it (often killing it on the savings and investing part) managing their own planning for a decade or longer. Money is rather nuanced across the board, making it really hard to know what you don't know.

The good news is that you don't have to know everything about money, but only what applies to your situation. When I talk about financial literacy with clients, we certainly cover plenty of the basic topics and questions: budgeting and how to budget (especially saving and how to save), having the right amount of emergency fund saved for a rainy day and in what type of account, knowing what debt is "good" debt vs "toxic" debt and how to pay all debt down most effectively. The list goes on.

Knowing the answers to these questions for your situation will increase your financial literacy and build a strong financial foundation. But there's so much more: like learning to unlearn things first, from misinformation to bad habits to common stressors. Then on to seeing clearly what planning opportunities and strategies are available to and appropriate for you. Here's a reading list to get you started building up your personal financial literacy. Also, understanding your Financial "Why" will help you determine healthy financial habits that align with your personal values and priorities. I like Saundra Davis' Wheel of Life worksheet for assessing personal values.

We planners also work hard to educate our clients on how very expensive financial mistakes can be. Even something like paying debts off in the wrong order can cost you thousands of dollars in the long-run. Similarly, investing in the wrong funds or contributing to the wrong investing accounts for your needs is unfortunately costly, all while you were trying to be prudent and save.

All of this is why it is so important to get an expert pair of eyes to fact check your planning to-date and make sure you're on track for what you want in life. Just like long-term investment returns are stronger the earlier you start, the returns on investing in yourself by working with a CFP® practitioner compounds in your favor.

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Have questions? Drop a comment on this post.

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📌 Sage Financial Planning LLC is a California RIA providing values-based financial planning and financial advice in San Diego, CA and nationwide via virtual meeting platforms. Sage Financial specializes in serving those who believe in closing the wealth gap: First Generation Wealth Builders who want to change their financial family trees for the better, as well as values-based clients who want to not only achieve financial security and freedom for themselves, but who want to support their communities in meaningful ways and leave the world better than they found it.

For more information on our holistic financial planning offerings, please visit our Service Options page.

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