Financial Literacy: Where Should You Start Your Journey?

Here’s the truth – we often realise the need to educate ourselves about money at different ages of our lives.

Some people realise it early in their lives, some at the middle of the road, and some due to the pressure of upcoming retirement.

With these diversities, how would we even know where to start our journey to financial literacy?

I. First, we have to understand what MONEY is.

It’s a tool, a commodity, that we use to exchange for products or services.

Money by itself is neither GOOD nor EVIL. Thus, the saying “Money is the root of evil” is a complete fallacy.

How we use it and what do we do with it is the one with morality. We either use it for good intentions or for the wrong reasons.

Firearms are used by soldiers to protect a nation. It’s also used by terrorist to spread terror. Firearms are neither good, nor bad by itself.

We use knives as a tool in cooking, to feed people. Some use it as a weapon on crimes. Knives are neither good, nor bad.

Money is a tool. Nothing more, nothing less.

II. The Goal is to have a plan.

We can look at money as grease to a machinery, and our lives as the systems to those machines.

The main goal is to keep the grease flowing (easing friction), to have sufficient grease flowing from one system to the next (Investing), while ensuring possible leaks are covered (Insurance).

In short, the goal is to look into our own lives and prepare for what’s ahead (Plan A), while looking outside and to those lives connected and dependent to us just in case life turns out different from what we have expected (Plan B).

There is no one-size-fit-all Financial Plan. That’s why it’s very important to assess ourselves – the things that we have, the things that we might have in the future, and the things that we may lose when we don’t reach the future.

III. We’ll eventually learn and look for instruments that we can use to address different areas of our lives.

Financial literacy is not just about investments, nor just about insurance, nor savings.

It’s a combination of all of these instruments in consideration to several factors of our lives – age, personality, dependents, financial resources, and more.

It’s about how to handle money as a tool, and make it work towards the attainment of what we want to happen in our lives – ensuring that they will happen, with or without us.

If you are just starting this journey, it’s true that there is still a long way ahead, with a lot of things to learn. And it will never end.

But as we go along this journey, we’ll eventually realise that it’s not really about the money. It’s really about getting it out of the way so we can focus on the things (people and relationships) that really matter.