Understanding Money

Why is financial literacy important?

Money is not important; it is the value it has that makes it important. We give the money value by using it constantly. For example, when I go to the store to buy a bag and see a bag I like before I see that bag, other people have already seen the bag. If the bag was still there when I saw it in the store, it means that the people who saw it didn't have value for the bag, but now that I have seen the bag and liked it and am willing to buy it, I am giving the bag value. But before that, I must first decide things like whether I need it or want it, how long it will last, and whether I can afford to buy the product.

Advantages and disadvantages of understanding and lack of understanding of money

The advantages and disadvantages of understanding money are many and can be seen every day in our lives. For example, before going to college, I needed to pay and withdraw money from the bank multiple times. While doing that, I also needed to fill out my tax form, which, when not done right, could result in a lot of consequences for me. The result of this is some of the disadvantages of not understanding money, and it could be worse. Growing up, I didn't have the mindset of saving. When I got money, the first thought that came to mind was what I should buy, and when the answer to that question came, I made the choice to buy it. Recalling the actions I took while growing up is just too funny for words. The reverse of this is that when it is done right, it is an advantage and also less work for me because I don't have to spend more than I otherwise should.

Why Understanding Money is Useful

Using money requires skill and a certain mindset; it’s not an all-in-one thing; we are creatures of habit, so it might be easy to understand the sentence “Don’t bite off more than you can chew.” This sentence just summarizes the problem, which is that we are too eager to take and spend without regard for the consequences. As a result, when the time comes to pay for your action, it might have been too late to cry. If, for example, you thought more It's true that current situations could be an issue; if that's the case, why did you spend so much? The lesson learned, hopefully, would be to save, and while saving, put your money towards something useful that, in the near future, could make you better than you are right now. This is not as detailed as it could be to describe the usefulness of money, but the point is: don't spend more than you have and instead save.

How was my understanding of money compared to the past before watching or reading about financial literacy?

Money and its usefulness keep changing, but the core of what makes financial literacy remains the same; however, to me, it wasn't always the case. I had no goals or plans for a while until recently when a situation arose where I was asked a question about my current financial situation, and I just froze. True, I knew what they were asking, but I just didn't understand, and it was embarrassing being asked about your financial situation, and you couldn't reply. So I watched videos and did a detailed examination of my current financial situation after watching some videos, and then I thought of how much of an idiot I was. If I had just taken my financial literacy or understanding of money seriously, none of this would have happened. This is a fact.