rambler.ru

Банк России запустил Интернет-портал Fincult.info, который нацелен на повышение финансовой грамотности граждан России – сайт начал свою работу 31 августа, сообщили в пресс-службе ЦБ.

Российский мегарегулятор запустил в работу электронный портал, целью которого является формирование финансовой культуры граждан. «В материалах сайта в простой форме разбираются ситуации, с которыми может столкнуться каждый – от планирования личного бюджета до поиска оптимальной стратегии формирования будущей пенсии», — заявили в пресс-службе Банка России. Однако в ЦБ отметили, что данный сайт – не практическая инструкция к применению, а всего лишь рекомендации. По плану Центробанка, сайт Fincult.info позволит не упустить из виду что-нибудь важное и не оказаться в критической финансовой ситуации.

Сообщается, что новый электронный ресурс будет систематически пополнятся информационными материалами, в том числе текстовыми и видеоматериалами, которые позволят гражданам России – участникам финансового рынка, обрести базовые знания, которые посвящены финансовым потребностям граждан. В частности, здесь можно узнать, как проверить подлинность банкнот или на что обращать внимание при получении кредита, чтобы не стать жертвой мошенников. «Со временем на сайте появится больше тестов, калькуляторов, игр. Так, в 2018 году на сайте будет размещен вики-каталог мошеннических схем на финансовом рынке – пользователи смогут сами добавлять истории, которые послужат предупреждением для других», — добавили в Центробанке.

Сейчас же сайт имеет в своем арсенале сервис проверки легитимности финансовых организаций, с помощью которого перед заключением договора с финансовой организацией можно проверить наличие у нее лицензии или записи о ней в государственном реестре. С помощью кредитных и депозитных калькуляторов можно рассчитать комфортную для гражданина долговую нагрузку и возможный доход по депозиту.

Дмитрий Нечетов

Читайте также

90000 Financial Literacy: What You Need to Know 90001
90002 If you’ve spent any time reading up on education or financial news lately, you’ve probably come across the term 90003 financial literacy 90004. The goal behind teaching financial literacy is to help people develop a stronger understanding of basic financial concepts-that way, they can handle their money better. 90005

90002 That’s a worthy goal, especially when you consider a few stats about how the typical American handles money: 90005

90008
90009
90002 Nearly four out of every five U.S. workers live paycheck to paycheck. 90005

90012
90009
90002 Over a quarter never save any money from month to month. 90005

90012
90009
90002 Almost 75% are in some form of debt, and most assume they always will be. 90019 (1) 90020 90005

90012
90023

90002 90003 Ouch! 90004 With those numbers, it’s no surprise that leaders in business, education and government want to help spread the benefits of greater financial literacy to as many people as possible.90005

90002 In fact, it mattered so much to lawmakers, in 2004 the Senate passed a resolution officially recognizing April as Financial Literacy Month to «raise public awareness about the importance of financial education in the United States and the serious consequences that may be associated with a lack of understanding about personal finances. » 90019 (2) 90020 90005

90002 Lead others to financial peace! It’s easier than you think. Learn how. 90005

90002 As more people become aware of the importance of financial literacy, we should be asking: 90003 What skills, traits and best practices do people show who are «financially literate»? 90004 And, 90003 How does this skill set really affect personal finance? 90004 90005

90040 What Is Financial Literacy? 90041

90002 90043 Financial literacy 90044 is the possession of skills that allows people to make smart decisions with their money.90005

90002 And do not be misled by the word 90003 literacy 90004. Although understanding stats and facts about money is great, no one has truly grasped financial literacy until they can regularly do the 90003 right 90004 things with money that lead to the 90003 right 90004 financial outcomes. 90005

90002 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 the concepts financially literate consumers have mastered: 90005

90056 Budgeting 90057

90002 It’s one thing to learn how to add and subtract in elementary school, but it’s something else entirely to actually apply those principles to your own finances! Most Americans live paycheck to paycheck, and it’s largely because of a gap between what the math says they can afford and what they actually spend. Financial literacy can make people habitual budgeters who are willing to save for their goals and delay gratification in order to have peace of mind, both today and in the future.90005

90056 Emergencies 90057

90002 Only 39% of Americans would be able to cover a $ 1,000 emergency if one happened to them today. 90019 (3) 90020 And actually, about 40% of Americans would not even be able to cover a $ 400 emergency. 90019 (4) 90020 But people who become financially literate learn how to build a $ 1,000 emergency fund-and from there, learn how to grow their emergency fund to include three to six months of expenses for those times when life throws a bigger curveball.90005

90056 Debt 90057

90002 In addition to mortgages, which amount to nearly $ 9 trillion in debt nationwide, Americans are weighed down with auto loans, credit cards and student loans. The Federal Reserve Bank of New York reported in 2018 that the total consumer debt in America had reached $ 3.95 trillion. 90019 (5) 90020 To see how that debt load impacts daily living, consider the fact Northwestern Mutual reported that 40% of Americans spend up to half of their monthly income in debt payments.90019 (6) 90020 A big part of financial literacy focuses on understanding how the time and money people spend on paying off debt hurts their ability to invest in their future. 90005

90002 Teaching financial literacy skills in schools is becoming more popular all the time. After all, what better place to communicate these life lessons around money than in the classroom? And you can probably guess that we believe financial literacy is as fundamental to learn as reading and writing! 90005

90040 How Many People Are Financially Literate? 90041

90002 Based on the stats that we’ve already considered, it’s fair to guess that the majority of people do not know how to handle their money.And while there’s no one sure way to measure how many people are financially literate, the lack of certain skills would confirm that guess. 90005

90002 For example, if you used the number of people who do not live paycheck to paycheck as an estimate of financial literacy, 90043 only about 20% of people would qualify 90044! 90005

90002 Budgeting could be another skill for measuring financial literacy. And how do Americans stack up in that department? Sadly, not even a third of people earning a paycheck (32%) stick to a budget.90019 (7) 90020 90005

90002 Let’s look at the findings of the National Financial Capability Test given to over 17,000 people from all 50 states. The National Financial Educators Council (NFEC) reports that less than half (48%) of participants were able to pass the 30-question test that covered things like budgeting, paying bills, setting financial goals, and other personal-finance related topics. 90019 (8) 90020 90005

90002 90043 Fewer than half are passing a basic exam on financial literacy-and the average test taker only answered 63% of the questions correctly! 90044 90005

90002 On the bright side, there’s a trend in the other direction: Many young people are boosting their financial literacy through personal finance courses in high school.And research shows it’s having a positive impact! Ramsey Solutions Research surveyed over 76,000 American students who had taken a personal finance class, and many of the results are in stark contrast to the NFEC report. We found that students who had taken a course in personal finance highly understood key financial topics such as: 90005

90008
90009
90002 The difference between credit cards and debit cards (86%) 90005

90012
90009
90002 How to pay income taxes (87%) 90005

90012
90009
90002 How home, auto and life insurance work (90%) 90005

90012
90009
90002 How student loans work (94%) 90005

90012
90009
90002 What a 401 (k) is and how it works (79%) 90019 (9) 90020 90005

90012
90023

90040 Are You Financially Literate? 90041

90002 To help you decide whether you should include yourself among the financially literate, think through the following questions and give yourself some honest answers.90005

90008
90009
90002 Do you know how to create a monthly budget that includes all of your basic expenses, your bills, any debts, and your sinking funds for future purchases? 90005

90012
90009
90002 Are you currently debt-free? Or are you taking active steps to reduce your debts? 90005

90012
90009
90002 Do you know about how much money you spend to cover living expenses over a period of three to six months? 90005

90012
90009
90002 Do you have an emergency fund in place that would allow you to get through a sudden large life event like a layoff or a totaled vehicle without having to borrow money? 90005

90012
90009
90002 Do you have an understanding of how compound interest allows invested money to grow over time? 90005

90012
90009
90002 Do you know the various kinds of insurance that are needed to protect your finances and investments? 90005

90012
90009
90002 Do you understand the difference between an investment and insurance? 90005

90012
90023

90040 What Action Steps Can You Take? 90041

90002 Hopefully you were able to answer «yes» to all- 90003 or at least some! 90004 -of the assessment questions.If so, congratulations! You’re probably among the fortunate few who have achieved real financial literacy! 90005

90002 But in case you found yourself answering «no» to some of the questions, do not be discouraged! There are steps you can take to get a better understanding of how money works. In fact, the same Ramsey Solutions research we cited above shows that many who take personal finance courses experience awesome results with their money when following these steps: 90005

90056 1.Start a baby emergency fund. 90057

90002 Begin by saving up $ 1,000. This is to keep you from being thrown off track when those inevitable, tough financial events hit you. (You’ll be making this emergency fund even bigger later on.) 90005

90056 2. If you’re still in debt, get out of it. 90057

90002 You’ve seen for yourself how much debt slows down financial progress. To rid yourself of pesky debts, just list them from smallest to largest. Then use the debt snowball method to pay them off.As you pay off the smallest debt, roll what you used to pay toward it onto the next largest debt. Repeat this process until all your debts are cleared! 90005

90056 3. Finish your emergency fund. 90057

90002 This is another area where taking a class on good money habits helps, and many of those who do so save an average of $ 3,000 per year in personal earnings. 90019 (10) 90020 To complete this step, move all the momentum you gained while paying off debt toward saving up three to six months ‘worth of living expenses.90005

90056 4. Invest 15% of your income in retirement. 90057

90002 It’s never too late (or early) to plan for retirement, as our research shows. Eighty-seven percent of students who take a finance class agree they feel confident about investing. 90019 (11) 90020 You can face the future with hope when you have a plan that includes smart retirement investment. Use good growth stock mutual funds in a tax-advantaged retirement savings plan like a 401 (k) or Roth IRA. Investing 15% can help ensure you beat inflation over the long haul-while still having enough income to put toward paying off your home.90005

90056 5. Save for college. 90057

90002 Over half (51%) of students who learn about finance in high school plan to pay for college themselves. 90019 (12) 90020 The best methods are Education Savings Accounts (ESAs) and 529 plans. 90005

90056 6. Pay off your mortgage early. 90057

90002 This monthly housing payment is one of the biggest expenses for most people. Imagine never sending out this payment again-and owning your home free and clear! 90005

90056 7.Keep building wealth and giving generously. 90057

90002 The purpose of financial literacy is not just head knowledge. The real goal is to be able to use your money to do the things you truly want to do, like retire with dignity, spend free time with family, and give to other people and worthy causes. 90005

90040 Financial Literacy Is Changing Communities for the Better 90041

90002 By now, you’ve got a pretty good sense of where you stand in terms of your own financial literacy. Maybe you have a lot to learn, but it’s encouraging to know that increasing financial literacy could transform whole families, communities and even the nation! 90005

90002 Many educators are already working hard to bring this kind of understanding to millions of students nationwide.Every year, thousands of graduates go through our middle school and high school personal finance curriculum, 90003 Foundations in Personal Finance 90004, and gain financial literacy skills that empower them for a lifetime of money success. We love that so many young people are picking up these essential skills and habits! 90005

90002 90003 Are you a teacher? If so, check out Ramsey Education to learn more about how you can equip your students with financial confidence! If you’re not a teacher, tell the teachers in your life about our life-changing 90004 Foundations in Personal Finance 90003 curriculum.90004 90005

.90000 The Four Foundations of Financial Literacy 90001

90002 The four foundations you need to increase your financial literacy and get richer 90003

90004 This just in: consumer debt, not counting mortgages, is the highest it has ever been, even adjusted for inflation. 90005

90004 90007 90008 90005

90004 According to a depressing article in the «Wall Street Journal» entitled, «Families Go Deep in Debt to Stay in the Middle Class,» consumer debt has risen to over $ 4 trillion.The mega-rise in debt is filed by: 90005

90012
90013 $ 1.5 trillion in student loan debt 90014
90013 $ 1.3 trillion in auto loan debt (up 40% when adjusted for inflation over the last decade), at an average of $ 32,187 per loan 90014
90013 A surge in unsecured personal loans 90014
90019

90004 As the article points out some could view this rise in debt as a vote of confidence in the future of the economy: «In one sense, the growing consumer debt is a vote of confidence in the future.People borrowing money today expect to have the income tomorrow to pay it back. Consumer debt tends to rise when borrowers feel secure in their jobs. » 90005

90004 However, the rise in costs for basic living expenses would point otherwise. While middle class incomes have gone up 135% over three decades through 2017, unadjusted for inflation, the following basic living expenses have gone up significantly more: 90005

90012
90013 College tuition by 549% 90014
90013 Health care by 276% 90014
90013 Housing costs by 188% 90014
90019

90004 In short, it’s getting more and more expensive to stay in the middle class and more of the middle class are getting poorer and poorer as a result.Meanwhile, the rich in America are getting richer and richer. Why? 90005

90034 How financial literacy can make your rich or poor 90035

90004 According to the «Wall Street Journal» article, «The median net worth of households in the middle 20% of income rose 4% in inflation-adjusted terms to $ 81,900 between 1989 and 2016, the latest available data. For households in the top 20%, median net worth more than doubled to $ 811,860. And for the top 1%, the increase was 178% to $ 11,206,000. » 90005

90004 What does this mean? 90005

90004 It means that, as I mentioned earlier, the middle class are getting poorer and poorer why the rich are getting richer and richer.A big catalyst for this is the difference between the financial literacy of the middle class and that of the upper class. 90005

90004 In 2017, Champlain College released the results of its study looking at the state of financial literacy in the US (by state, in fact). The study’s methodology looked at, in some cases, 71 different data points in five categories: financial knowledge, credit, savings and spending, retirement readiness and other spending, and protect and insure. 90005

90004 The results? Not good.90005

90004 As Vermontbiz.com reports, the study «shows that more than three-quarters of adults live in states with poor grades. This means that too many American adults are deficient in financial knowledge and skills, which leads them to make uninformed and often poor decisions about their money … The number of financial decisions an American citizen has to make continues to increase, and the variety and complexity of financial products continue to grow. Adults often do not fully understand debit and credit cards, mortgages, banking, investment and insurance products and services, retire-ment planning, and many other financial topics.»90005

90004 The gap in financial literacy between the middle class and the rich can be easily seen in this graphic from «The Wall Street Journal» article: 90005

90004 90051 90005

90004 Simply put the lack of financial literacy has caused the middle class to increase their debt nearly three times more than their assets. The rich, on the other hand, have the inverse ratio. They have increased their assets by nearly three times their debt. In all likelihood the rich are using that debt to fund the acquisition of their assets, while the middle class are leveraging their assets to get into deeper debt for liabilities.The most basic of financial equations for getting poorer. 90005

90034 The cost of poor financial literacy 90035

90004 In another interesting, though much less informal survey, The Financial Educator’s Council asked 3,006 people this question: «Across your entire lifetime, about how much money do you think you have lost because you lacked knowledge about personal finances?» 90005

90004 As CardTrack.com reports, the of lack financial knowledge is collectively costing Americans more than $ 2.3 trillion dollars over their lifetime. «Respondents estimated that their lack of financial knowledge cost them an average of $ 9,724.83 (calculated by averaging the total number of respondents choosing each category, using the lowest number in each spread).» 90005

90004 Personally, I’d say these folks are low-balling. After all, how can you expect people with no financial knowledge to accurately guess how much that lack of knowledge is truly costing them? As they say, «You do not know what you do not know.»90005

90004 At Rich Dad, we’ve seen folks grow their financial knowledge to make more in a month in passive income than the respondents estimated lifetime loss. Indeed, a little bit of financial education put into practice goes a long, long way-and so does a lack of financial education. 90005

90034 How do you fix poor financial literacy? 90035

90004 Many people have opinions on how to fix the problem of poor financial literacy. Unfortunately, much of what is labeled out there as financial education leaves a lot to be desired.From my experience, it centers on concepts like saving, investing in a 401 (k), getting a college degree, paying down debt, and home ownership. In short, it centers on the old ideas about money. 90005

90004 I’ve said it before, when you follow the old rules of money, you’re screwed financially. 90005

90004 So, given the huge costs of financial illiteracy, and the lack of true financial education in America, I thought I’d briefly offer what should be the four foundations of financial literacy.90005

90004 These four foundations are the baseline for a truly comprehensive financial education. 90005

90034 Financial literacy foundation # 1 — The difference between an asset and a liability 90035

90004 Many people think they know what is an asset. For instance, you probably think your house is an asset-but it’s not. The truth is that just as there are two definitions of an asset. 90005

90004 Accountants use one definition that requires lots of financial calisthenics to make people and companies feel richer than they really are.This keeps them employed and their clients blissfully ignorant. 90005

90004 The rich use another definition grounded in simplicity and reality. An asset is anything that puts money in your pocket and a liability is anything that takes money out of your pocket. 90005

90004 Your house is not an asset because it takes money out of your pocket each month. Even if you own your house outright, you still have to pay for the taxes, maintenance, and more out of your own pocket. This is why it’s not hard to see that the middle class struggling to buy a house, even as the price of housing has outpaced their earnings, has made them poorer, not richer.90005

90004 Conversely, if you own a rental property, that can be an asset-if it puts money in your pocket each month in the form of cash flow. When your tenant pays rent, they cover your mortgage, maintenance, taxes, and more. This would explain why the rich, the top 10%, can increase their debt but exponentially increase their assets. They use debt to buy assets that create more wealth. 90005

90034 Financial literacy foundation # 2 — Cash flow versus capital gains 90035

90004 Most people invest for capital gains.The rich invest for cash flow. 90005

90004 Simply put, investing for capital gains is like gambling. You invest your money and hope the price goes up. For instance, many people buy a house hoping they’ll be able to sell it for more money later. In the meantime, they have to pay their mortgage and home expenses. Money goes out of their pocket. It becomes a liability. 90005

90004 The problem is that when you invest for capital gains you have no control over whether the price goes up or down, and the bigger issue is, if you do make a profit, you pay the highest rate in taxes.90005

90004 Conversely, the rich invest for cash flow. So, for instance, they buy investment real estate with other people’s money, find tenants to pay the expenses, and collect rent each month. It becomes an asset. And if there’s capital gains, that’s a bonus. 90005

90004 By investing for cash flow instead of capital gains, the rich have control over their income and pay the lowest rate in taxes-and sometimes nothing in taxes. 90005

90004 But investing for cash flow, while a simple concept, requires a strong financial education in order to make your own financial decisions.90005

90034 Financial literacy foundation # 3 — Using debt and taxes to get richer 90035

90004 Your financial adviser will tell you that debt is bad and taxes are inevitable. But the rich understand that both debt and taxes can be used to create immense wealth. 90005

90004 When it comes to debt, there are two kinds-bad and good. When your financial adviser tells you to stay out of debt, she means stay out of bad debt. 90005

90004 Bad debt comes in the form of borrowing money for liabilities such as using credit cards to buy TVs and take vacations, borrowing a line of credit on your personal home, and more.90005

90004 Staying out of bad debt is good advice, but the problem is that your financial adviser will not tell you about good debt. 90005

90004 Good debt is debt used to purchase assets like rental property. 90005

90004 When you use the bank’s money to purchase cash-flowing real estate, you use less of your own money to secure an asset by paying only a down payment instead of full price, and your tenant’s rent pays off your debt while you own the asset and pocket the profit. 90005

90004 When it comes to taxes, the rich understand that governments write tax codes to encourage specific types of behavior.If governments want you to build affordable housing, they give you a tax cut. If they want to encourage oil exploration, they give you a tax cut. If they want to see higher employment, they give you a tax cut. 90005

90004 The secret is that most tax benefits are made to help entrepreneurs and investors. With the right financial education, you too can utilize the tax code to not only get richer, but also pay nothing in taxes. 90005

90004 Utilizing good debt and getting richer through taxes takes a high level of financial literacy.But everyone can learn and put these principles into practices. 90005

90034 Foundation literacy foundation # 4 — Making your own financial decisions 90035

90004 When you’re not confident about your knowledge of money, you let others make your financial decisions for you. 90005

90004 You let your broker decide how your money should be invested. You let your bank tell you what interest rate is worthy of your money. You follow whatever investing trend is popular in the news. 90005

90004 The rich do not follow the crowds.They set the trends and are gone by the time the trends become mainstream. What’s their secret? They think for themselves about money and make their own financial decisions because they have a high financial intelligence. 90005

90004 The key to building great wealth is having great knowledge to act on and great wisdom to know which course of action is the best. 90005

90004 This kind of knowledge and wisdom only comes through a high financial intelligence gained from applying yourself to financial education.90005

90004 Are you ready to increase your confidence about money by increasing your financial education? Are you ready to start making your own financial decisions? 90005

90004 Check out our free, financial education community here, and start your journey to financial literacy today. 90005

90004 Original publish date: April 03 2017 90005

.90000 Learn the Basics of Financial Planning 90001
90002 90003 90003 90005 90002 A financial plan is a plan you set to make sure you achieve your financial goals for the year. In this article, we will take you through a step by step process to improve your financial literacy. 90005 90002 You will know how to implement good financial skills by learning about different kinds of income sources and expenditures that you need to budget for in your financial plan. 90005 90002 So let’s get started on improving your financial literacy so that you can save more and make more.90005 90012 Financial Literacy — The Why? 90013 90012 90015 5 Reasons Why You Need a Financial Plan 90016 90013 90018 Did you know that setting a plan as a guideline to know how your money should be managed, builds up your wealth? Well, Yes! A financial plan is a plan you set to make sure you achieve your financial goals for the year. Learning how to follow your plan, improves your financial literacy. 90005 90018 Here are the 5 reasons why you need a financial plan: 90005 90022 90023 Helps you 90024 save money to invest 90025 for future growth: By monitoring your savings, you take right decisions on future investments while taking into consideration both your personal circumstances and objectives.90026 90023 Gets you 90024 ready for important life milestones 90025: In life you go through vital milestones such us marriage, education or a bigger family, a bigger home. Whether using the money you have saved or borrowing money; following a financial plan helps you manage your money to put your dreams to reality. 90026 90023 Helps you 90024 manage 90025 sudden financial 90024 changes 90025 that can really affect your life. Being prepared for such uncomfortable circumstances like a bad year for example, a job loss or any economic slump keeps you secured at least for a while.90026 90023 Helps you 90024 control your expenses 90025 even better: By monitoring your spending patterns and expenses, you can increase your cash flow and you can easily get back on track if you happen to go off limits! 90026 90023 Helps you 90024 reduce 90025 90024 your stress 90025 and gives you peace of mind: following a financial plan as a guide to your expenses and savings, gives you financial security for the coming years and even sometimes for a lifetime thus, helping you sleep better at night! 90026 90047 90018 These 5 reasons are the main key points why planning financially is essential.So work your way through a clear, useful and highly accurate financial plan and improve your financial literacy! 90005 90018 90005 90012 Financial Literacy — Income 90013 90054 90015 5 Common Sources of Income in a Household 90016 90013 90018 Where is money entering your household coming from? Your daily job, maybe extra cash you receive from after school tutoring, spouse’s income or a long distance family member helping out with your expenses. 90005 90018 Any source of money received by a household, usually on a regular basis, is called «Income».A household needs income to meet its basic needs and to enjoy the wants it desires. 90005 90018 Here are the five common kinds of income in a household: 90005 90064 90023 Salaries: a fixed sum of money, usually received every month, for doing a particular job. 90026 90023 Sales of products or services: making your own money by selling products or services. It can also be money received from selling handmade goods or providing vocational services in your free time. This can be a side income received in addition to your main salary.90026 90023 Pensions: money received regularly, during years of employment, to be saved for retirement. 90026 90023 Profits from investments: for example, buying a property; hoping its value increases over time giving you profitable returns. Also, buying bonds or stocks can help you gain money from their profits (to be explained later in the coming courses). 90026 90023 Gifts or Remittances: rewards or money received without an effort. Usually, money received from family working abroad to help in household expenses.90026 90075 90018 Without income, we can not survive and the more income we make the more chances we get to live life in our own way. So start working on increasing your income levels and improve your financial literacy! 90005 90018 90005 90012 Financial Literacy — Expenses 90013 90054 90015 Main Categories of Expenses in a Household 90016 90013 90018 Do you feel overwhelmed every time the end of the month approaches? Are your costs out of control? Phone bills, car rent, debts, kid’s birthday parties and many more.90005 90018 All costs you pay, whether for buying a product or for taking a loan, are called expenses. 90005 90018 Every household has many expenses but by learning how to classify your expenses you can start managing your money wisely. There are three categories of expenses: fixed, savings and variable expenses. 90005 90018 Fixed expenses do not change over time and thus, are independent of your income change. They might change slightly but you know they are due on a regular basis. The following are 90024 flexible expenses 90025 in a household: 90005 90064 90023 Housing: money you pay for rent of a house, electricity, heating and telephone bills.90026 90023 Transport: money you spend on car rents, public transport, taxis and parking. 90026 90023 Essential Living Expenses: money spent on ‘needs’ rather than ‘wants’. Groceries and Education are examples of essential expenses. 90026 90023 Debt Payments: money that you owe and should be paid back on time to avoid debt accumulating. Cards, loans and mortgages are types of debts. 90026 90075 90018 Variable expenses do change over time. When your income increases you tend to increase your variable expenses.The following are 90024 variable expenses 90025 in a household: 90005 90064 90023 Non-Essential / Discretionary Expenses: money spent on ‘wants’ rather than ‘needs’. They are extra expenses that make us happy by allowing us to live in luxury. Vacation, clothing and entertainment are examples of discretionary expenses. 90026 90075 90018 90024 Saving Expense 90025 is the money you need to save for future expenditures. 90005 90064 90023 Saving expenses in a household: money saved for future goal-oriented expenses such as retirement, education, emergencies or a bigger home.Savings can also be money kept aside for irregular expenses such as gifts and health charges. 90026 90075 90018 As explained, there are many expenses in a household but all expenses fall under the 3 main categories: flexible, variable and saving expenses. Know what your expenses are and try to classify them accordingly! 90005 90018 90005 90012 Financial Literacy — Budgeting 90013 90054 90015 Steps on How to Create a Yearly Budget 90016 90013 90018 Some people use the word budgeting when talking about creating a financial plan.90005 90018 A Budget helps you keep track of your expenses to make sure that you are spending less than your income. It is advised to prepare a yearly budget to visualize how and where your money is going. 90005 90018 Here are 3 steps to help you start budgeting: 90005 90022 90023 90024 Add up your income (Net income) 90025: This is the first step in a budget plan. Add all kinds of income you are receiving in a year however, cut off any pay that you are not taking home. For example, if a percentage of your income is deducted automatically to pay taxes and health benefits then do not include this specific amount of money in your total income.Any source of income should be added such as salaries, pensions and remittances. (Income already discussed in the previous course) 90026 90023 90024 Estimate your expenses 90025: This is the second step of a budget plan. Estimating expenses is not as easy as it may seem especially if you’re a kind of person whose expenses change dramatically. If so, get a rounded estimate by calculating an average for this significantly changing expense. Find the sum of your expected expenditures including both fixed and flexible expenses.(Expenses 90024 90025 already discussed in the previous course) 90026 90023 90024 Calculate the Difference: 90025 After calculating your Net Income and your Total Estimated Expenses, subtract the 2 amounts and get the difference. This result is the end product of your yearly budget plan. If your result is a (+ ve) number, then you are spending less than your earnings. Congratulations, this is the amount of money you are gaining and you are a step towards building your wealth. But if your result is (-ve) number, then you are not spending within your means and the number you obtained is your loss.So move on to the next video to learn how to discipline yourself to follow your plan. 90026 90047 90018 By following the above steps, you have successfully created your yearly budget! However, keep in mind that your budget plan should be flexible and you are advised to update it regularly according to your circumstances! 90005 90018 90005 90054 90015 Ways to Implement Good Budgeting 90016 90013 90018 Did you know that creating a budget is not sufficient? Making sure you reach your financial goals, cover emergencies and pay bills on time is also essential in financial planning.By disciplining yourself to follow your budget you are acquiring good budgeting skills, making your life easier to live. However, good budgeting is encouraged not only for building your money but also, most importantly for giving you the freedom to live life your own way; making every moment count. 90005 90018 Knowing where to spend your money efficiently you can keep your expenses within your means; putting you on the right track for building a fulfilling future in all aspects of life. 90005 90018 The following are 4 steps on how to manage your expenses and thus, implement good budgeting: 90005 90018 1 Move 90024 high debt payments to lower debt payments: 90025 90005 90064 90173 Choose debts with minimum interests.For example, when you are not able to pay off your credit card in the same month, then you are better off taking loans since the interest rates are much better. 90026 90175 Take debts to cover assets rather than discretionary spending. Loans against property give you more time to pay them off and with a lower interest. This makes them easier to settle than personal loans. 90026 90075 90018 2 90024 Pay all debts on time 90025: The most important key to good managing of debts is ensuring interests are kept at minimum.So, pay your monthly bills on time to avoid late fee and financial charges; thus making your debts easier to pay off. 90005 90018 3 Build 90024 your credit profile: 90025 Do not sacrifice positive accounts for those that have already affected your credit. Just pay your old debts off when you can afford too. Build up your credit profile to build up your financial opportunities. 90005 90018 4 90024 Manage 90025 what 90189 you see 90190 as your 90024 essentials and non-essentials 90025 efficiently: 90005 90064 90195 By ranking essentials and discretionary items in order of importance you can eliminate extra unnecessary expenses.90026 90197 Use whatever is left from your income, only when your essential payments are fully covered first. 90026 90199 Extra money earned can be spent on non-essentials as a trade-off to saving however, controlling purchases and making rational spending decisions is vital. 90026 90075 90018 So now manage your expenses and track your budget over time but most importantly, make sure you are doing it! This will help improve your financial literacy. 90005 90018 90005 90012 Financial Literacy — Financial Services 90013 90054 90015 Essential Formal Financial Services that you Should Know About 90016 90013 90018 Part of financial planning is learning the services provided by your banks and other financial institutions.In this video, you will learn about 4 essential ones available today. 90005 90018 Such services improve your current financial situation by helping you make rational decisions about where your money should be allocated. Get to know these services well and what advantages they provide. Also, you are suggested to acknowledge the downgrades of these services to avoid life-changing problems. 90005 90018 These institutions provide the following 4 essential services you can use today: 90005 90022 90023 90024 Insurance 90025: Money you pay for a company to provide you with future protection against financial literacy, life and health losses.This type of service is common today since it helps customers sleep better at night knowing they are in safe hands. 90026 90023 90024 Savings Accounts 90025: You can open a savings account at a bank or through mobiles such as e-banking. If you do not have access to a bank, postal saving accounts are still available. This account provides you with a safe convenient method for saving money, moving you financially forward. 90026 90023 90024 Cards: 90025 Help you access money without carrying amounts of cash with you all the time.A debit card is a card that allows you to withdraw money only from the amount credited in your personal bank account. A credit card, however, allows you to borrow money from your card issuer (bank or financial institution). This amount is interest-free if paid back by the end of the month. Debit cards are more advisable since they free you from debt accumulation. 90026 90023 90024 Investments: 90025 Purchasing bonds or stocks in the market. When buying stocks an investor becomes an owner in the company.However, by buying bonds an investor becomes a creditor to the company. The stockholder has a share in the profits if the company does well but the bondholder does not. However, a bondholder gets paid before a shareholder in case of bankruptcy. 90026 90047 90018 As explained, there are many financial services available. Analyzing the market and acknowledging both advantages and disadvantages of these services could help you make the right decision on what choices to take. But remember to take your precautions and pay your debts on time to stay safe! 90005.90000 What Is Financial Literacy and Why Is It Important? 90001 90002 Financial literacy is the ability to understand how to make sound financial choices so you can confidently manage and grow your money. 90003 90002 When you’re financially literate, you’re able to allocate your income toward various goals simultaneously-not just to ongoing expenses, but to savings, debt repayment and a rainy day fund too. You can navigate the financial marketplace with self-assurance, and you have the tools to thoroughly research things like loans, credit cards and investment opportunities.90003 90002 Here’s why financial literacy is important, and how to improve yours. 90003 90008 What Does It Mean to Be Financially Literate? 90009 90002 The Federal Financial Literacy and Education Commission, established by Congress in 2003 identified five key principles of financial literacy. Being financially literate, according to the commission, means understanding each of these components: 90003 90012 90013 How much you earn, including your pay, benefits and tax withholdings 90014 90013 How to save and invest, including creating an emergency fund and setting aside money for both short- and long-term goals 90014 90013 How to protect your money by buying insurance and knowing how to avoid fraud 90014 90013 How to spend wisely through budgeting and comparison shopping 90014 90013 How to borrow money at the lowest possible interest rate, and how to keep your credit strong with responsible repayment habits 90014 90023 90002 Examples of financial literacy in action are: 90003 90026 90013 Comparing promotional periods on balance transfer credit cards so you have an extended time to pay off debt 90014 90013 Increasing your retirement savings rate every time you get a raise 90014 90013 Checking your credit report regularly for errors 90014 90033 90002 All of these behaviors help you advocate for yourself in the marketplace, and save money in the long term.90035 90003 90008 Why Is Financial Literacy Important? 90009 90002 Financially literate consumers can manage money with confidence, which means effectively allocating their earnings to their goals and limiting or attacking their debt. Here are the ways financial literacy can affect your life: 90003 90026 90013 90043 Understand how to budget 90044: To pay for expenses, save or get rid of debt, you must understand how much income you’re taking in and distribute it effectively. Making a budget is your first step toward a true understanding of money management.Once you have a budget, you can continue to track spending and revisit your spending plan regularly. There are many budgeting methods (zero-based, two-account, etc.), so choose the one that you’re most likely to stick to. 90014 90013 90043 Understand and manage debt 90044: When you are financially literate, you recognize the importance of seeking out the lowest interest rates when comparing loan terms. You also know that paying off credit card balances each month is your best bet for preventing interest charges and high credit utilization, which affects your credit score.If you already have debt, financial literacy can help you choose the best methods to get out of debt, either on your own or with the help of financial products such as debt consolidation loans or balance transfer credit cards. 90014 90013 90043 Understand how an emergency fund works 90044: A crucial way to prevent debt from building is to create an emergency fund, a savings account that you can draw from when unexpected expenses arise. A financially literate saver knows how much to set aside-ideally three to six months ‘worth of expenses-and replenishes it when necessary.90014 90013 90043 Plan for retirement 90044: While developing an emergency savings account, saving for retirement should be a concurrent long-term goal. When you’ve become financially literate, you can calculate how much to save and which types of accounts will help you get there. 90014 90033 90008 How to Build Financial Literacy 90009 90002 If you’re eager to become more financially literate, there are many tools you can use on your own to help understand and manage money. 90003 90026 90013 Start with tools available for free from your bank, credit union or credit card issuer.Your bank’s app or website may help you track spending patterns. Several banks also offer free credit score tracking programs. 90014 90013 You may also consider using a third-party budgeting app to keep track of spending and financial goals. A budgeting worksheet like the one provided by the Consumer Financial Protection Bureau (CFPB) is another option. (In fact, the CFPB offers many consumer tools on a range of topics, including guides on how to make financial decisions such as buying a house.) 90014 90013 Local resources such as your state’s consumer protection agency or attorney general’s office provide support for consumers and may offer educational programs on financial topics. Credit counseling agencies, which employ counselors certified in budgeting and debt reduction techniques, also are useful local options. 90014 90013 If you have the means, consider working with a financial advisor, such as a certified financial planner. They have deep expertise in complex financial goal-setting, and their services can include guidance on tax planning, saving for college and retirement, and paying down debt.You can search for a certified financial planner in your area, or one you can work with remotely, using databases like the XY Planning Network or the Garrett Planning Network. 90014 90033 90008 Why Understanding Credit Is Important to Your Financial Literacy 90009 90002 Lenders use your credit score to decide whether to work with you, and landlords may use your credit score to determine whether you qualify for an apartment. Your credit score is the backbone of your financial life, and having a good one gives you the opportunity to meet financial goals like buying or renting a home.90003 90002 To develop behaviors that strengthen your credit score, familiarize yourself with the factors that contribute to it: 90003 90026 90013 90043 Payment history 90044: Payment history is the biggest contributor to your FICO 90083 ® 90084 Score 90083 ☉ 90084, the credit score most commonly used by lenders, accounting for 35% of it. Pay all bills on time to keep this important part of your credit as strong as possible. 90014 90013 90043 Credit utilization 90044: The amount of credit you use compared to your credit limit is your credit utilization, which accounts for 30% of your score.Experts say using more than 30% of your available credit can negatively affect your scores. Ideally, pay off credit card balances each month to keep your credit utilization as low as possible. 90014 90013 90043 Credit mix 90044: The different types of credit you use factor into your score, but less significantly than payment history or credit utilization. Lenders like to see that you can manage multiple categories of credit, from student loans to credit cards to mortgages. 90014 90013 90043 Hard inquiries 90044: Having credit is important, but only apply for the credit you need.That’s because your credit score incorporates the number of credit applications you’ve made. Every application causes a lender to pull your credit report, resulting in a hard inquiry. Hard inquiries show up on your credit report, and too many will start to affect your credit score and appear as a risk factor to lenders. 90014 90013 90043 Negative information 90044: If you miss a bill payment, declare bankruptcy or otherwise demonstrate that you did not manage a credit account as agreed, that information will appear on your credit report for seven years in most cases and up to 10 years for severe infractions.Lenders will take this into consideration when deciding whether to approve you for new credit. 90014 90033 90002 Check your credit score, bank accounts and credit card balances regularly to maintain an ongoing picture of your finances. When you view your credit report, you’ll be able to see whether your credit card balances are too high, for instance, or if you’ve missed a payment and need to course-correct so you do not miss any more. Knowing your credit score also helps you determine which loans or credit cards you’re likely to qualify for.90035 90003 90008 Knowledge Is Power 90009 90002 Financial literacy is not a luxury-it’s a necessity. Understanding money management will help you feel in control of your finances. Ideally, with strong financial literacy, you’ll be confident in money management to the point where you can focus your energy elsewhere: on hobbies, family, friends and the parts of life that money can not buy. 90035 90003.