10 keys to financial fluency: Learn, save and invest with confidence
Want to know how to become financially stable? Use this time-honoured wisdom for savings and investment
Financial fluency, also known as ‘financial literacy’, is generally thought of as the ability to understand and effectively use various financial skills. This could be anything from personal financial management, budgeting, trading and investing to having an understanding of savings and debt. Really, anything that helps a person or institution to get a clear sense of financial wellbeing. Other terms often used interchangeably for financial fluency are financial education and financial knowledge, so if you see any of these terms you know what it’s talking about.
But how can you become fluent in financial matters? What tools can regular people use to boost their knowledge of financial matters to be able to save money and invest in the full knowledge of what they’re doing? These days, online trading tools such as MetaTrader 5 give ordinary people the confidence and the know-how to be able to take full control of their financial independence and decision-making thanks to a transparent, easy-to-understand approach.
MetaTrader 5, a tested and respected platform for financial literacy, allows users to open opposite trading positions and quickly modify orders thanks to its 38 built-in technical indicators, 22 analytical tools and 46 graphic objects. This, combined with an unmatched order processing speed, make it an invaluable tool in the arsenal of anyone interested in pursuing their financial goals.
Here are 10 other tips and tricks for how you can learn to save and invest with financial fluency:
- Education, education, education: Read as much as you can about financial literacy in finance books and on the internet, and be sure to attend workshops and online courses on personal finance.
- Set clear financial goals: Ensure you have defined short-term, medium-term, and long-term financial goals that are Specific, Measurable, Achievable, Relevant and Time-bound (SMART).
- Create a budget: Learn to understand where your money is coming from and where it is going by tracking your inbound payments and expenses. Then allocate a portion of your income towards savings and investments.
- Build an emergency fund: Save enough money to cover at least 3-6 months of living expenses in case of unexpected financial emergencies.
- Pay off your debt: Prioritise paying off any high-interest debt you may have hanging over, such as credit card debt, to avoid paying unnecessary interest fees.
- Diversify your investments: Spread your investments across different asset classes – whether its stocks, bonds, real estate or commodities – to reduce the risk to any single one of them. You could consider investing in mutual funds or exchange-traded funds (ETFs) for diversification.
- Invest regularly: Make investing a habit by setting up automatic contributions to your investment accounts.
- Stay up-to-date: Keep yourself informed on current affairs in financial news and with market trends. It’s a good idea to subscribe to a financial newspaper of magazine, and follow reputable finance experts online.
- Seek professional advice: Even the pros need help from someone, and you can’t go it alone. A top tip is to consult a financial advisor to create a personalised financial plan based on your goals, risk tolerance and financial situation. However, these advisors can sometimes come with high fees and commissions, so choose a fee-only or fee-based advisor if possible.
- Be patient and disciplined: There’s no getting around it – investing is a long-term endeavour and requires patience. Just stick to your financial plan even during market fluctuations and avoid making impulsive decisions based on emotions.
Remember, becoming financially fluent takes time and effort, but the benefits of financial security and independence are well worth the investment in yourself.
