opinion
reak up with eing roke!
Buying an apartment. Going on a vacation. Paying college tuition. Shopping. Going to the movies. Paying the bills. All of these activities and more require you to be smart about how you handle your money. Otherwise, you will end up with empty pockets. And you don’t want that, do you? Financial literacy can help you.
H
ave you ever found yourself in a situation where you feel like you don’t have control over your money? You can’t exactly pinpoint where your money is going. And you don’t have any cash planned for the next period. Panic and confusion overwhelm you. There is no need to worry because you aren’t alone in this. Many young people (and even adults) are facing this all over the world. Being financially literate means that you have the set of skills to make informed and effective decisions regarding your money and to manage your personal finances. Further, financial literacy refers to being able to understand basic financial concepts like credit, savings, investment, interest rates, and more. What can you do with these skills? You’ll be able to plan and manage your costs as well as your pocket money, stipends, salary, and other forms of income. Besides that, financially literate people can successfully manage their debt, know when to invest
26 - VOICES
and save money, and even plan for old age and retirement. So, don’t be surprised when you find out that many people regard it as one of the essential skills for adulting the right way. Moreover, they say that numbers always tell the truth, right? Let’s look at some of the statistics. Only a third of adults all over the world are financially literate. It’s also found that developing countries have lower levels of financial literacy when compared to developed countries. In fact, we shouldn’t look much further than what’s happening in our communities. In Macedonia, it’s estimated that financial literacy lies at just around twenty percent. It puts the country in the group of countries with low levels of financial literacy. As it was pointed out, successfully managing your finances is one of the vital aspects of financial literacy. The first step is to outline your goals. These can be shortterm ones like paying the electricity
bill or buying a new pair of jeans, and long-term ones like starting a business or buying stocks. Once you determine your goals, you can outline all of your costs and income in a table, which is called a budget. This budget can be done on a piece of paper or in a computer program or application like Excel, GnuCash, and more. With that being said, one of the basic rules for making the financial budget is the 50/30/20 rule. It means that you can divide your income and spend 50% on your needs (such as housing, transport, food), 30% on wants (like eating out, shopping, buying songs), and
