The Importance of Financial Literacy and Saving Habit
Basic life skills include financial literacy and saving money. We are considering how to teach children this habit early on. Because money mostly defines our lives. I am not sure whether I exist," stated Jorge Luis Borges, a famous short story writer.
I am all the authors I read, the people I've met, "All the women I love and all the cities I visit." Adding our financial savings completes the jigsaw. All this requires money. Financial knowledge and saving money shape us.
Contrary to assumptions, high-IQ people may have more financial issues. According to a survey, 14% of those with an IQ of 140 had hit their credit card limit, compared to 8.3% of those with an IQ of 100.
Long-term investments do not reflect talented participants' intelligence. Despite earning more, they spend and invest poorly. Saving needs focus and patience, not intelligence.
Financial literacy has little to do with field education. Researchers ask business students how much they would pay each sold-out basketball game ticket. Students typically pay $28. Participants average $60 when asked how much they can spend with a credit card for the same ticket.
Loaning money to buy anything has become so common that we might be convinced to pay more rapidly for credit card transactions. Credit cards cut like chainsaws. Being proficient with it will save you time and help you budget. If you approach unknowingly, your arm may be at risk.
A smart teacher takes his student to the forest. They pause by a blooming sapling. Student is instructed to uproot this fragile sapling. This activity is easy for the student. He then gives him a larger sapling and orders him to remove it similarly. The student dismantles it again, this time trying harder.
Later, when he requested the student to remove a tall sapling, the student used equipment but nevertheless removed it. Finally, they instruct his student to remove a huge old tree. Naturally, the pupil denies it. Habits are similar.
"Their roots grow stronger as they mature, making them impossible to pull out."This type of behaviour is tougher to break." Credit cards can be used like a chainsaw in a money-saving lifestyle.
Don't stress about investing—just move the money you don't need to a few equities and wait. Being on watch and panicked when stocks fall may prevent you from saving. Naval genius is "a man who knows how to act averagely while everyone else around him acts as if they were crazy." Same goes with investment.
Panicking and cancelling investments during recessions will temporarily soothe you. After the recession, you realise your losses. Reinvesting money will fall behind after the recession. History shows this in recessions.
People's investment interventions during the 2008 crisis were more decisive than their 2000–2008 actions. Those that survived the slump and recovered are financially literate. However, a simple calculation shows that panickers lose their capital.