Financial literacy is an important concept that should be mastered by all individuals. To be financially literate, you must understand and know how to use different skills to monitor your personal budgets and investments. Since we all are women in business, it’s even more vital that we possess these necessary skills in handling our own finances.
A large part of financial literacy is being comfortable with using excel or google sheets. These tools are extremely helpful in keeping track of budgets and having all the numbers in our lives organized. To build skills in excel, there are various free YouTube tutorials you can use.
Budgeting is mainly broken down into two parts: income and expenses. At the start of each month, have a set budget that pertains to your planned income and planned expenses. Break down your budget for different categories. For example, planned income can come from your wages, gifts from family members, a small business’ revenue, and allowance from your parents. The planned expenses section can be broken down into groceries, shopping, bills, and transportation costs. Making your very first budget may be difficult because you aren’t aware of how much money goes to each category, but with time and practice, it will get simpler. I like to estimate my planned expenses based on the previous month’s expenses, and add a bit of wiggle room so in case something does happen, I won’t be blowing the budget.
Knowing how to invest is crucial to not just being financially literate, but also for your future. You can invest in many things including stocks, CDs, mutual funds, and bonds. Opening an online brokerage account is free, or you can even get a financial advisor. A really helpful book to learn about investing is Michele Cagan’s Investing 101.
There are many other resources you can utilize to build your financial literacy like podcasts (Clever Girls Know) and books (Rich Dad Poor Dad or The Intelligent Investor). Becoming financially literate builds an important skill set that will be useful for the rest of your life.