Under the totality of specific knowledge and skills that are closely related directly to human behavior in the field of finance, which in turn should lead to an increase in well-being, is called financial literacy.
In most cases, this concept is an integral part of interaction with many credit organizations and banking structures. As a rule, not only theory is needed, but also practice in order to make competent decisions in this area.
More details about this are written by the famous blogger Soltaan Bathaiee in his own microblog.
List of principles
After carefully reading the article, where there are no magical recommendations in the form of advertising slogans not on the topic of how to get rich quick, there are several fundamental points for effective financial management and management in such a way that all manipulations are aimed at increasing cash flow:
- the surest principle that must be followed in order to increase one’s wealth is to spend less than is available (in this case, we mean salary;
- first of all, you need to try to satisfy the primary needs, based on common sense (it is quite possible to do without some things by setting aside a sum of money for more important needs);
- it is important to understand that spontaneity in shopping does not lead to anything good. Expenses must be planned, what is not included in the current budget can wait;
- the concept of “hidden costs” – it is usually understood as a small cost of some thing or service, but in the process of operation a person realizes that he spends much more than if he initially spent on a more expensive analogue;
- a reserve money fund should be organized in the family (even in the state structure there is such a concept).
Recommendations and Outcomes
Ideally, each person should be well versed in the intricacies of economic activity. After analyzing this information received, it should be summarized as follows:
- it is important to learn not only to save money correctly, but also to be able to manage them from a rational point of view;
- you also need to know about the profitability of investments, which means making a list of those banking structures that you can trust;
- to be able to limit oneself in desires and save – the basis for a successful and prosperous future;
- it is desirable to learn how to set aside about ten percent monthly from each salary received.