Notes on Financial Literacy Practices

Introduction

• Importance of financial literacy: not just about what you do, but also about what you don’t do.
• Sharing six practices to avoid in pursuit of financial empowerment.

1. Do Not Maximize Spending

• Avoid stretching finances to limits, especially for big purchases (e.g., cars, houses).
• Example: Approved for an $800,000 mortgage, but chose to spend half to avoid living paycheck to paycheck.
• Financial stability is crucial; additional costs (taxes, fees) can add up.
• Maintain a lifestyle that one income can support to prevent financial stress in relationships.

2. Do Not Waste Money on Disposable Items

• Avoid single-use products (e.g., paper towels, makeup wipes).
• Transitioning to sustainable or reusable options saves money (e.g., menstrual cups).
• Repurposing items (e.g., old t-shirts as rags) is a practical money-saving strategy.

3. Do Not Fall for Lifestyle Inflation

• Resist the urge to increase spending as income rises (lifestyle creep).
• Focus on investing in the future rather than upgrading lifestyle.
• Set a spending limit for desired items; save the difference for investments.
  • Example: Found a skirt for $7 instead of $60; saved $53 for investment.

4. Do Not Ignore Investing

• Overcome intimidation from investing jargon; start with basics.
• Investing is essential for financial freedom; educate yourself on earning, saving, and investing.
• Start with small amounts (e.g., $50, $100) to build confidence.

5. Do Not Compare Your Journey to Others

• Social media often presents a skewed view of financial success.
• Financial success is personal; avoid comparing your goals to others.
• Focus on your own progress and financial journey.

6. Do Not Accept Societal Norms Without Question

• Question societal expectations regarding marriage, homeownership, etc.
• Align financial choices with personal values and desired lifestyle.
• Active living vs. passive living: Choose what aligns with personal beliefs.

Conclusion

• Financial literacy is a transformative and empowering journey.
• Reflect on personal practices to avoid for better financial confidence.
• Embrace being financially savvy for independence and peace of mind.