Financial education: how important is it and where to start?

Do you know the benefit that a financial education can bring into your life?

Many people try methods and practices to save money, earn more money, get out of debt, among other situations, but these methods and tools without being prepared and knowing how to use them, may not help at all.

Nowadays, everything boils down to being prepared to make the right decisions in your financial life.

There are people who have good ideas, but are unable to put them into practice simply because they don't know how to act and when to make the necessary changes.

Therefore, it is extremely important to be prepared to organize yourself financially.

In this article, this topic will be addressed, with the aim of helping you understand the importance and how to start yours. financial education.

What is financial education?

Firstly, the concept of financial education consists of the process of transforming an individual's habits, behaviors and values through the sharing and practice of information.

In this sense, preparation for such a situation develops based on the way someone understands the world of money and its possible tools for managing it.

Note that this goes far beyond simply saving money, as it also involves awareness of the opportunities and risks involved in this matter.

As a result, in practice, the financial education provides means and conditions for a person to better decide what to do with their money.

In other words, how much to save, where and how to invest, these questions can be easily answered if you are prepared to make decisions about your finances.

In this way, building assets, achieving stability, honoring regular commitments, and avoiding headaches seems like a utopia, but it is possible with a good education.

In short, your achievements will be conditioned by two actions: work, which will bring resources, and the appropriate knowledge to multiply those resources.

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How important is financial education?

Initially, financial independence is a dream for many people.

After all, it's not bad to have enough money to make your dreams come true, have a comfortable life, and be successful without needing anyone.

As much as this condition may seem unattainable, know that it is perfectly possible.

Financially prepared people act consciously and make decisions focused on their personal budget.

As a result, these people live without financial worries and have complete control over their actions.

So, to reach this level you need a change of mindset regarding how you use your earnings, this is very important.

Being independent isn't just about saving money or cutting back on weekend outings. While this can help, it will require more incisive methods to transform your financial situation.

Therefore, the importance of financial education in your life.

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How does it work?

To understand how it works and how to handle it, you must first take three points into account: earning, saving and investing.

It may seem obvious, but it is something that is generally not part of the lives of many people in the world.

At least from people who are always in constant difficulty.

On the other hand, successful people, in their field of work, know how to deal with these concepts and make the most of them.

In this sense, financially centered and balanced people learned not to accumulate debts by buying things that were beyond their economic means.

This happens when you have control over your income, including being able to precisely identify each expense made.

In short, this is important because when you control and record your expenses and other movements, you can replace or eliminate unnecessary expenses.

Financial education: how to educate yourself?

Seeking financial education will bring great benefits, such as a more peaceful life and a comfortable future.

In this sense, putting knowledge into practice will help you keep all your expenses up to date, as well as investing in financial services, achieving positive results in the short and long term.

Here are some steps you can take to become financially educated:

1. An organization spreadsheet

Initially, creating a financial spreadsheet will be the first important step in changing your mindset and getting organized.

So, start by mapping out your expenses to control them. In the future, you'll start investing and applying your money in different areas.

And for this to happen in a safe and organized manner, this mapping and control will help a lot.

2. Develop realistic goals

One of the important steps of financial education is to set goals, but make sure they are realistic, whether personal or professional.

Goals should be set based on priorities and objectives to be achieved. Start by setting short-term goals, acquiring a medium-value item or investing in a fund with a quick return.

This way, you will be able to see the results of your investment, and this will encourage you even more.

Whenever you reach a goal, increase the challenge and focus on your objectives. The more challenging it is, the greater the benefits will be in all areas.

This will help you eliminate unnecessary expenses and unprepared investments.

3. Know the types of investments

Before investing, it is very important to know the different types of investments available on the market. Each type of investment requires a different profile.

Therefore, it is up to the person to evaluate their goals and available resources to know which investment is ideal for the situation.

Regarding fixed income, there are good options on the market, even if the person doesn't have much experience investing.

For example, a student who is just beginning to practice financial education, or the person who has a low salary at work.

So, you can, for example, use Tesouro Direto and choose between fixed-rate and fixed-rate.

The difference between the two is being able to tie the profitability to indexes such as Selic, IPCA or negotiating a value at the time of purchasing the security.

In short, the difference with Tesouro Direto is that it allows contributions in low amounts, starting at R$30 reais.

There are other options, such as Bank Deposit Credits, which are loans made available to banks to enable their plans and diversify their activities.

4. Always track your investments

From the moment a person begins their financial life, it is essential to monitor and analyze their investments daily.

The investment market fluctuates a lot, and you should be careful to see if the investment you made is the best for your money. Perhaps it will yield more in another investment.

Therefore, there are several applications, spreadsheets, and investment websites that can help you track your investments correctly.

This way, you will be able to keep your budgets and investments organized and confident about their progress.

5. Organize and pay off your debts

Don't let everyday expenses get in the way of your financial life, preventing you from investing or interfering with your financial education.

Therefore, try to keep your daily expenses balanced and eliminate those that are not mandatory.

In this sense, make a list of priorities, review your credit card expenses, renegotiate, and eliminate small debts that are limiting you.

Before you start investing, it's important to avoid overdue or accumulated debts. Correct past financial mistakes so they don't interfere with your financial future.

6. Respect your money

Finally, keep in mind that it is very difficult and hard work to earn your hard-earned money and then use it in any way without any responsibility.

Therefore, we must use money consciously and wisely, giving value to the sweat of our brow.

It is obvious that as time goes by, expenses always come.

However, it is important to understand that the more we save and find ways to organize our finances, the greater the benefits will be.

And the chances of ensuring a better and successful future for our families will be much greater.

Conclusion 

Financial education It is essential for anyone who wants to have a peaceful, comfortable life with balanced finances.

Therefore, it is worth investing in your education, and reaping the rewards in the short and long term, think about it and go for it.

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