3 Reasons Why Financial Literacy Is Important – No Matter Your Age

3 Reasons Why Financial Literacy Is Important – No Matter Your Age

Don’t worry – you’re not late for the party! And while you might feel behind financially, allow me to tell you that you are not. You are right on time if you are NOW making an effort to get ahead with your finances.

While money is not the most important thing in life, it’s a resource that must be managed properly. To manage it well, it helps to become financially literate. Affordable financial planning in the Bay area provides precisely this – helping support your long-term financial goals. 

Are you ready to grasp financial literacy based on where you stand? No matter what your age – there’s an affordable plan for you!

Release all fear of judgment here – no one expects you to know what you were not taught. From seasoned business executives, retirees, and savvy investors to high school students, college education seekers, and young parents, understanding financial concepts is critical to your financial independence. 

This is where financial literacy applies, and I step in as the humble founder (once in your shoes) of Humanity Wealth. I share this because I deeply care as a “family man” myself!

What Is Financial Literacy?

What Is Financial Literacy?

There are diverse ways to define financial literacy. However, at the crux of this vital subject is the ability to have the knowledge and a basic understanding of all (or most) financial topics and terms to make sound financial decisions.

To be financially literate means to grasp ideals of financial affairs, from basic budgeting to retirement planning. This does not mean you need to be an investment strategy expert, but more so, have adequate education and tools to feel confident in personal finance responsibilities. 

Lucky for you, I have crafted an affordable subscription-based model for financial education – so you can feel more financially confident in the future. 

In honor of April’s “Financial Literacy Month,” allow us to share five key pillars of financial literacy from the Financial Literacy and Education Commission:

  • Earn
  • Save and Invest
  • Preserve
  • Spend
  • Borrow

I firmly believe that anyone with a family should invest in financial literacy support. It is estimated that four out of ten people do not have a retirement plan.

This goes to show that financial illiteracy can result in a lack of planning. Again, how will you know how to plan if you don’t know what to consider and include? I remind my clients all the time to focus on things that matter (in relation to financial literacy):

We understand that financial planners often seem intimidating because most are advanced in comprehensive financial planning, stock options, investment management, estate planning, and well beyond. Remember, this took years of applied education. 

Since the financial application may not be your wheelhouse, wealth advisors expect you to come to them knowing that you may be starting at ground level. That is perfectly acceptable. The simple act of asking for help shows that you know yourself well enough to ask for help.

Why Financial Literacy Is So Important

Consider your money mindset: this is something that you more than likely learned growing up, and it may be subconsciously ingrained within. 

Now think of one word to describe money: ____________ (this word will give you a good idea of how you feel about money, which can often help you understand your money mindset).

Fact: Money and personal finances touch our lives significantly as we become adults. My opinion: These topics are not taught early enough, from taking out a student loan to acquiring your first job and filing your taxes.

Unless your parents or guardians helped you dig into standard financial practices, you might have some homework to do. Below are five reasons we believe financial literacy is vital for overall well-being.

1. Financial Literacy Is Empowering & Builds Confidence

When it comes to money decisions, consumers may choose to work with a knowledgeable professional. This could be initiated when you are signing up for a credit card or checking account, buying a new home, or starting to file more complicated taxes. Working with an independent financial advisor in Newark, CA, at any point is always a good idea.

It often feels like there is more information on the other side for some. This isn’t an issue when working with someone you trust; the more knowledge or understanding you have, the better. You can know what questions to ask. You can feel okay about turning down any offers if you know the other alternatives. The list can go on!

By covering your bases and being financial literate, you can be more empowered and confident when dealing with anything related to money. 

This is especially true for starting your first job. When you are financially literate, you won’t be as frazzled when you have to start making decisions around your company benefits, tax withholdings, filing your taxes, etc. Ultimately, this can help minimize errors. 

2. Financial Literacy Can Impact The Trajectory Of Your Life

2. Financial Literacy Can Impact The Trajectory Of Your Life

Consider two different people.

One became financially literate throughout high school and college (maybe through several free online courses). The other did not gain much in terms of financial literacy. They both graduated college and started their first real job.

The financially literate individual stuck to the following:

  • Maintained a budget
  • Never kept a balance on their credit card
  • Contributed to their company’s 401(k) up to the company’s match (with the goal to increase their own contributions by 1% each year until reaching the maximum contribution allowed)

The other financially illiterate individual did not do any of these things. 

While these three actions are not the end-all, be-all, they could potentially impact the trajectory of someone’s life. These actions could compound over many years and open up opportunities that may not have been possible – such as early retirement or the optionality of work.

3. Financial Literacy Builds Great Financial Habits & Behavior

While financial literacy often gets paired with young people, that is not necessarily the case.

Age is just a number; knowledge is based on education. A student can have as much or more financial knowledge as a retiree based on decisions made and guidance received. So choose to create new behaviors and habits starting today. For those nearing or in retirement, having a solid foundation of financial literacy is critically important to having a successful retirement for those nearing or in retirement.

The truth with personal finance, financial planning, and investing is that having expertise does not equate to success. This is because success in these areas is more related to good behavior.

Specifically, when it comes to nearing retirement or being in retirement, investing can get quite emotional. It is common to shift one’s retirement nest egg (portfolio) to be more conservative the closer you get to retirement (and during retirement). This is especially true if you start using the portfolio to generate some income to live on. 

In these instances, and if the markets are volatile, emotion can cause a retiree to lose sleep at night, put their entire portfolio in cash, etc. These potential actions are not wrong, but these reactions can dissolve if a financial plan is in place, backed by a solid financial literacy foundation.

Finally, when pre-retirees shift to a whole new way of life into retirement, a mental shift must be made. This shift has to do with transitioning from saving over your working life to living off of your savings. The more financial literate you are around investing, financial planning, and retirement, the easier this transition may be.

Humanity Wealth Can Help!

As you can see, we are big proponents of financial literacy. If you are interested in becoming more financially literate or know someone who could benefit from learning more, please reach out. 

Get on the financial literacy fast-track to potentially save money and build wealth. We have a plan you can afford!


As your first piece of homework, we invite you to cut one habit that costs you at least $50 each month. Whether it be coffee, an entertainment subscription you no longer use or trying a generic vs. expensive brand of shampoo – try it for one month. Then take that money not used and apply it to get financial guidance.

Then schedule an introductory call to begin new financial behaviors of your own. Healthy financial habits will surely follow. And don’t stress – we’ve got you covered.

eBook Offer: 5 Easy Steps to Start Retirement Planning Now

More about the author: Harry Sherdil

As a fiduciary financial advisor at an independent firm, Harry strives to offer the same resources, tools, and research as bigger firms while serving new and existing clients' best interests.