Financial freedom has a different definition for everyone. Generally speaking, it means having enough passive income from savings, investments, and any other assets to support whatever lifestyle you want without working a full-time job.
Financial freedom is the ultimate goal for many but to get there, you need to master financial literacy first.
There are various perks and benefits to financial literacy but ultimately it comes down to these.
7 Reasons Why Improving Your Financial Literacy Matters
#1. Less stress
It minimises the level of stress faced from financial mismanagement which ultimately contributes to a healthy mind. Financial stress is known to be one of the most significant contributing factors to several mental health conditions caused by mismanagement and mounting debt.
#2. Better relationships
It can impact your relationship positively. Couples who have adopted a specific solid financial plan do not incur unnecessary stress and relationship problems as often. Working together toward a healthy financial future usually builds stronger and more fulfilled relationships.
#3. More options
It offers more options to enjoy a fulfilled life at your own leisure. People who manage their money well and plan how they are going to spend or invest it have better control over their finances. They can be a lot more flexible with their budgets than when finances are tied up in debt.
#4. Freedom to choose
It gives you more freedom to choose how you spend your time. Whether you still work for someone else or yourself, by managing your finances well, you’re much better able to control what you do outside of your working hours.
#5. Safety net
It allows for rainy days, unexpected surprises, or emergencies. When you have savings to fall back on, should something more extreme happen, you can face it calmly with a solution already there.
#6. Ability to give back
It gives you leeway to offer generosity and help others. There’s nothing more rewarding than the ability to offer a hand to those who truly need it, whether that’s in the form of money or your time.
#7. Impact the next generation
It allows you to carry a positive effect on young children when you have good personal finance management strategies. People with sound management of their personal finances usually have children who are more likely to become financially stable in adulthood resulting from what they had seen, heard, and learned while growing up.
Managing your money well takes discipline, drive and determination. Becoming financially free, financially independent or simply acquiring better financial literacy is not going to happen overnight. It requires planning and a change of habits.