What Is Financial Literacy?

Key Financial Literacy Terms

• Prioritizing your requirements and commitments while allocating a portion of your income to cover those expenses is the process of budgeting.
• Your emergency funds are cash reserves that you set away for unforeseen costs or financial emergencies. Typically, they are equivalent to three to six months' worth of your earnings or costs.
• Your financial obligations, such as those related to bills, rent, mortgage, food, transportation, and other expenses related to your way of life.
• Your total income includes your wages, salaries, tips, and other forms of compensation.
• A financial return on investment is sought through making investments, such as purchasing stocks, bonds, or other assets strategically with the intention of selling them at a profit.