Question

what are the three steps in financial literacy?

Answer 1

Financial Literacy could be in Financial Planning or in your business in general. The steps in elevating Financial Literacy may not be limited to a certain number. They are exhaustive in nature. However they can be broadly classified. The process of becoming financially literate entirely relies on DIY (DO IT YOURSELF) approach.

1. Self Assessment

Any individual needs to find out where they stand in terms of financial literacy. They need to assess their knowledge which could be in any domain of finance like personal finance, corporate finance. The stream of finance is huge, there are many branches which makes it important to know the specific field where financial literacy is required. Is it the stocks and market instruments, investments, fundamentals of the company or even knowing how to avoid heavy taxation on income. There are multiple ways of evaluating oneself online.

2. Gap Analysis

Gap analysis refers to knowing the present position and the position where one needs to reach. Simply put, it refers to the gap between our current financial knowledge and what will they require to become financially literate. There multiple websites that gives access to the contents that can be covered to achieve the purpose.

3. Filling the Gap

Once it is clear as to what aspect of finance is yet to be learned or be updated, there are a number of sources to fill the gap from offline to online means. One could refer to newspapers, books, journals or simply access devices to give you access to a large database to learn and update from. One can find free, premium and these days even freemium content to satisfy their requirements.

4. Application of theories to real life

Every individual have their own budget to take care of. An individual should not only make their own budget but also keep on monitoring it for improvement and avoidance of additional costs. From benefit to cost ratio to the burden of inflation on savings and earning in future, it helps an individual to plan accordingly.

5. Keeping track with happenings around the world

This is the best way. People who are touch with the happenings both commercial and economical tend to be more financially literate than others. This is not only due to just being aware about financial practices adopted around but at the same time, to keep adapting to the modern practices to keep up with the conditions of their surroundings.

Note: If the answer seems general please make us aware as in which specific field or space you referring to be more financially literate. In that care a more specific answer can be formed.