Financial literacy: Improve your ability to recover and build a better future

October 2020 – 5 minute read

What’s in this article:

 

What’s financial literacy?

Financial literacy is a term used to describe a person’s ability to understand and apply financial skills. These include budgeting, understanding interest rates and understanding debt management. When it comes to being the master of your financial destiny and feeling confident to make financial decisions, building your level of financial literacy will help, no matter what life throws at you. 

Why it’s important

Most of us want to make smarter choices about what we do with our money, and we want to feel confident we’re going to be ok. Understanding how your finances work helps.
 

One tip to keep in mind is how the two core principals of saving and debt can make a difference.
 

Having more savings than debt is a good place to be, but it’s not always possible. This is where knowing how to manage your money to meet your debts becomes important. One way to do this is to have a budget. A budget helps you plan and see where you can save or reduce your spending so you have enough money coming in to cover your bills and pay off any credit or loan debt on time. It can also help you see how you can reduce your debt, which is a good thing.
 

Unsurprisingly, the more financial knowledge you have, the more you may understand what’s happening in the economy both in Australia and overseas, and how changes may impact you.

Try these helpful tools

Money diary

A money diary may be helpful in tracking your expenses and understanding where your money gets spent. Record everything you spend your money on over a period time, like a  month. Then go back and check out where your money is going and work out if you’re happy with your spending or if you would like to make some changes.

Cost-Cutting Checklist

If your income has been reduced, or you want to reduce your expenses, then our Cost-Cutting Checklist (PDF 191KB) has some suggestions on places where you may be able to make some savings on common household expenses.

Budget planner

Our Budget Planner (PDF 718KB) is a step-by-step process to help you build a comprehensive and achievable budget to suit your financial situation. Budgeting is a helpful habit to get into, to keep track of your spending, look for ways to save, and to ensure you stay on top of your debts.

Managing Money guide

Life happens and sometimes that can derail your careful financial plans. Our Managing Money guide (PDF 1MB) helps you to understand your current financial position, develop a budget, and implement plans for a better financial future.

Talking finances with your partner

Money conversations with your significant other aren’t always easy but they are important. Get to know your, and your partner’s, financial personalities by taking the Understand your money habits quiz. The results include helpful strategies for having healthy money conversations with your partner.

Financial first steps in Australia guide

Designed for those who have recently migrated to Australia, or perhaps have recently left school and joined the work force, the Financial First Steps in Australia guide provides information on the financial system in Australia and useful hints and tips on getting started on your money journey in Australia.

 

You can download these tools and find other helpful information on our Master Your Money webpages. Or if you prefer to do things digitally, check out the Westpac App Budget Tools.