Knowing about financial education is what we need to have a better management of our economy. Experts tell us that everyone should have a basic level of financial education, since it is what will allow you to know how money works in the world and thus learn how to obtain, manage and invest it.
A person who masters financial education can make decisions about their economy and is less likely to fall into debt and economic problems, now what is financial education? it is nothing more than getting people to improve their financial well-being through the efficient management of their money.
There are five terms in financial education that you will always hear in this branch and that you must master. These are: income, savings, expenses, investment, and indebtedness. But what is it about?
Income: It is the money you receive from your job or income. A household can have more than one income.
Savings: It is the money from your income that you do not spend. Generally, it is recommended that you set aside a percentage of your income for this purpose. The only way you can't save, even a small percentage of your income, is if your expenses exceed what you earn.
Expenses: They have their own classification, and just as there are necessary expenses (such as basic services), there are expenses that are not. Basically, expenses are understood as the economic commitments that we must pay each month.
Investment: Part of the money you earn can be invested. That way your money will not remain static in a current account. Investments can be made in the short, medium and long term.
Indebtedness: Here we can talk about "indebtedness capacity" which allows us to have a resource of money (provided by financial entities) to acquire things. Good debt management allows you to have a favorable credit history that leads you to obtaining better loans or credit.
But now, it is not enough to know what financial education is, but to implement it. Managing money correctly is within everyone's reach, thanks to the different ways we have today to obtain information and training, such as the one provided by technology, because it is well known that in this era ignorance is an option.