When we are young we get taught how to identify numbers and count. As we progress through primary school we learn how to add, subtract, multiply and divide. When we reach high school we are taught algebra, geometry and calculus.
Typically, we are not taught about the power of compound interest in school. We don’t learn about the difference between good and bad debt. We are not given examples about the dangers of excess credit.
The lessons you learn about money will come from your parents, your siblings, your friends or your own experiences in earning, receiving, saving or spending money.
As an adult, you have a responsibility to educate yourself about how to manage your money. Just like you learnt to read (became literate) as a child, you need to make yourself financially literate as an adult.
A recent study from Standard & Poor’s found 36 per cent of Australians were not financially literate. Another survey from ME Bank found that 42 per cent of us do not understand compound interest and another 38 per cent have no understanding of how an interest-only mortgage works.
So ladies – get educated
Read a personal finance book.
Google a finance topic you have never really understood or bothered learning about, and read up (try ‘how to start investing’, ‘how to buy shares’, ‘how does compound interest work’).
Start a conversation with your friends or family about how they manage their money.
Do one of these things right now, so you can go into 2018 knowing more about your money and how to manage it than you did in 2017.
All the best, have a safe and happy New Year.
Her Money Matters.