Kavan Choksi: Why You Need to Be Financially Literate
The more financially literate people are, the more confident they are when handling money, according to finance expert Kavan Choksi. They will also be better prepared to handle the inevitable or even unexpected peaks and valleys during their financial lives if they understand and know how to prevent and manage problems.
As you improve your financial literacy, it is important to understand your income and expenses by creating a budget plan. After making a budget plan, you can monitor and adjust your spending as needed. Have your budget work for you by choosing a method that's likely to work for you. For example, you can choose from methods such as the 50/30/20 or zero-based plans.
Being financially literate can also help you with your debts. When you compare loan terms and seek the lowest interest rates, Kavan Choksi says you can save money in the long run. You can also stop yourself from accruing interest by paying off monthly balances on your credit card. Debt can also be tackled with the aid of a nonprofit credit counselor. You can do it on your own if you are financially literate.
A keen understanding of handling finances can also prevent mistakes that leave you in a bottomless hole. For example, interest rates on floating-rate loans could change monthly. Retirement contributions cannot be withdrawn until retirement. There are also seemingly innocuous financial decisions that may cost an individual's money in the long run. They may also prevent people from achieving their dreams.
As Kavan Choksi mentioned, you can avoid making huge financial mistakes by being financially literate. Additionally, fraud related to chit funds, pyramid scams, Ponzi schemes, and carding is rising. People with a good sense of finance will avoid such scams. It's also the cure for get-rich-quick schemes.
Kavan Choksi is a freelance business management consultant. He shares his knowledge of finance, business, and economics on his blogs, which can be found on this page.