5 Ways to Improve Financial Literacy and Live Debt-Free

Money is a precious commodity that can be hard to come by for many. It can be difficult for people to live their best lives, especially when the pressing issues of bills, rising prices of goods, and other necessities are always omnipresent. While a salary can look large for someone, this can be plenty or even too little, depending on their lifestyle. Finances are a complicated topic, as living in a consumerist culture means that there are just so many incredible things one will want to buy. 

However, what many people have experienced in 2020 is the importance of financial security and stability. With COVID-19 practically collapsing some industries in Canada, this has caused many Canadians to lose their jobs. During an economic downturn and a period heading towards a recession, people started to realize the value of money. 

Being Financially Literate

There are a few things that people can employ to be financially literate off the bat. A few things to note about the topic are that money management really matters, and debt is never a good thing to be in for extended periods. It also helps to save for the future and be prepared for losing a job at any given time, as the nature of work nowadays can be volatile. Additionally, responsibilities like taxes are always present, so ensuring that these are met on time is the people’s duty. Here are a few tips to help anyone stay on top of finances at all times:

1. Understand the Situation of Personal Finances

Anyone who earns is always recommended to take a look at personal finances. This area means studying salary rates and computing annual taxes, setting aside money for savings, how much needs to be invested, and what is spendable. The financial situation then sets the foundation for the coming months or years to work in-line with a person’s future plans. 

2. Budgeting Is a Must

While salaries look large on paper, there are always hidden costs that will take away from anyone’s salary. With tax being a given, utility bills, rent, and other monthly expenses play into what is mandatory to sustain life. Therefore, setting aside budgets for each bill that needs to be paid will ensure that they are always settled on-time to avoid surprises. There are plenty of apps that can help develop a monthly budget for personalized expenditures, which can be very useful in financial planning. 

3. Save for a Rainy Day

Emergency funds are a must for anyone in today’s world, as there are plenty of uncertainties that are a part of living life. Whether it is hospitalization, losing a job, being evicted, or other circumstances that can damage life, having a savings fund to cover any losses is essential. Sometimes, there is no control over what happens in daily life, so preparing for the worst is the best thing that anyone can do to soften the blow. 

4. Make Sure Debts Are Repaid On-Time

Debts that stack up can be crippling, and once they surpass a certain amount, they might even be impossible to repay. Not only does stacking debt cripple a person, but it also damages credit scores, which is an indicator of how financially literate someone is. While debts have to be taken on sometimes, such as home loans or car loans, this is not bad as long as the monthly dues are settled immediately. Debt relief is the best feeling in the world, as it entails not owing anyone anything. 

5. Cut Out Excess Expenditures

It pays to look at what is a want versus what is a need. Many items can be cut out of a person’s daily life and still allow them to live a comfortable life. Buying groceries and cooking food at home is a prime example of saving hundreds of dollars each month, as bringing food and coffee to work will always be cheaper. Other things like spending on simpler clothes, generic branded home products, and taking public transportation will help save thousands annually.

Conclusion

When it comes to financial literacy, everyone can benefit from the savings generated from being responsible with money. In fact, many millionaires built their empires through their savings combined with taking the risk to start their own businesses. With all the potential possibilities of being financially responsible, it makes sense to start taking steps towards debt relief and eliminating other irresponsible spending habits. 

DebtHelpers.ca assists with professional debt help in Canada for people who require a customized solution for debt relief. Living life free from the shackles of debt is the way to go, and anyone who wishes to be financially independent and responsible must start by getting rid of it all. Contact Debt Helpers to get in touch with a professional today!