7 Key Points To Money Literacy Finance King

Financial literacy (Money King) is the education and understanding of knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. These decisions include how to generate, invest, spend, and save money.

To be financially literate is to have some set of skills and knowledge that allows you to make informed and effective decisions with all of your financial resources.

That said, you need to arm yourself with the basic concepts of money management and here are five things you should know about money.

1. Earn More Than You Spend

If you really wish to be financially literate, the number one principle you should impose on yourself should be spending less than you earn.

This helps you to stay debt-free as you'll have no reason to borrow from anyone when you have enough to spend before another payday.

2. Diversify Your Investment

When you make and save money, you need to invest it in one business or the other to watch your money grow. But when you are investing, make sure all your eggs are not put in one basket.

If you put your money in one business, you'll likely face a greater risk of losses if the business faces hard times. This is why you should always Diversity your investment.

3. Save For Your Future

You may have heard the saying rich people invest poor people save.  That's not far from the truth but it's not completely the truth yes rich people invest but that is after they have cut out their expenses from their profit so they are been left with a planned amount the would be Re - invested therefore this not their first investment  basically they came from the point of saving for a dream which you should consider before making any decision now they invest their savings into the dream keep in mind that they have been saving for this dream for a long time so when you see them investigating large sums don't be deceived it has all been planned and accounted for as they have been saving for the future.

Saving for the future is one of the best financial decisions anyone can take and this does not mean you should deny yourself basic life enjoyment because you want to save for the raining days.

Enjoy life now but also be sure your hard work and diligence are aimed at securing your future.

4. Minimize Your Debt Load

Many people think debt is a bad thing. I believe this is a wrong belief. Debt isn't always a bad thing, it only becomes undesirable when it is mismanaged.

People have used debt do so many good things they otherwise couldn't have. But, when you take a loan, make sure you don't get into trouble with it matter of fact don't take a loan you don't have a solid foundation of paying back. Don't take more than you can handle and never fail to make the payment on time.

5. Prepare For Emergency

One of your saving plans should cover an emergency . This form of saving is a fantastic backup plan. Instead of plunging yourself into debt or selling your properties due to unexpected financial issues such as long-term illness and job loss, emergency savings help you to take care of these and prevent you from being in debt.

And since no one likes to be caught off guard financially, being prepared for an emergency is very important when it comes to your finances.

6. Cautiously Weigh Your Financial Risk And Reward

Risk and reward is and would always been the base of financial transactions and this you should take cautiously before making any financial transactions understand that it's a risk to your budget, plans and expenses so I advise you before you make that call before you make that jump consider the risk very well and examine the possibility of it not been successful... How do you survive the fall is what you have left able to catch you?

7. Adapt Financial Literacy Skills
You also need some financial skill set to keep your money flow in check if not for any reason for the sake of been financially responsible and understanding you expense rate you would need to understand

I.     Balance Sheet

II.    Income Statement

III.   Cash Flow Statement

IV.    Credit Score

V.     Return On Investment (ROI)

VI.   Profit And Loss

VII.  Capital Gain

VIII. Depreciation

Finally

Financial literacy means the ability to understand how money works in a business and in personal life.

Benefits Of A Financially Literate Nigerian Population

Financially literate individuals would be beneficial to themselves, the financial institutions/providers and the larger economy in the following ways;

Better equipped to make optimal choices in the use of financial products;

Pose lower credit and default risk;

Constitute a market for sustainable financial services & Products;

Reinforce competitive pressure on FIs for better products & services;

Promote Financial System Stability by Increasing market demand, and responsible use of financial services.