Financial Literacy Resources (2024)

FAQs

What are the big 3 financial literacy questions? ›

Financial literacy is the knowledge and ability to manage your money in a way that helps you grow stability and feel confident and resilient. Key aspects of financial literacy are budgeting, saving and managing debt.

Students classify those characteristics based on the three C's of credit (capacity, character, and collateral), assess the riskiness of lending to that individual based on these characteristics, and then decide whether or not to approve or deny the loan request.

Fewer than half are passing a basic exam on financial literacy—and the average test taker only answered 63% of the questions correctly!

Golden Rule #1: Don't spend more than you earn

Basic money management starts with this rule. If you always spend less than you earn, your finances will always be in good shape. Understand the difference between needs and wants, live within your income, and don't take on any unnecessary debt.

1. Budget your money. In general, there are four main uses for money: spending, saving, investing and giving away. Finding the right balance among these four categories is essential, and a budget can be a very useful tool to help you accomplish this.

The countries with the highest financial literacy rates are Australia, Canada, Denmark, Finland, Germany, Israel, the Netherlands, Norway, Sweden, and the United Kingdom, where about 65 percent or more of adults are financially literate.

Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending. Financial literacy can be obtained through reading books, listening to podcasts, subscribing to financial content, or talking to a financial professional.

Is financial literacy a hard skill? ›

Some examples of hard skills could include computer skills, software development, financial literacy, bilingual or multilingual capabilities, or campaign management. You can also see hard skills demonstrated by licenses or accreditations that a worker has earned.

The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.

In this approach, like other popular budgets, 80% of income goes towards spendings, such as bills, groceries, or anything else needed. 10% of income goes directly into savings to ensure that money is added regularly. The last 10% of income goes to charity.

The Bottom Line

Listening to podcasts and reading books about specific areas of finance that interest you help break down more complex financial topics and speed up the learning process. There are also many paid and free courses out there that offer courses in different areas of finance and investing.

What are the three basic questions addressed by the study of finance? What long-term investments should the firm undertake? How should the firm raise money to fund these decisions? How can the firm best manage its cash flows as they arise in its day-to-day operations?

How do financial goals vary across a person's lifetime? In what ways does money management impact reaching financial goals? What constitutes sound financial decision making?

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

Three main questions in corporate finance are capital budgeting, capital structure, and working capital management.