A Starter Tool for Financial Freedom

 

                                                                                                                                                                    

   Financial literacy is essentially having skills that develop your understanding of how money works-for example, how to earn, spend, and grow it. To be financially literate, you must gain specific skills related to money and money management, especially in regard to your own. These skills will allow you to more accurately plan for your future financially and ensure you are taken care of. Despite it being an essential skill, most of us can agree that while in school, finance and money management were not topics discussed extensively.

    However, It is no secret that the rich stay rich because of their knowledge surrounding money and how to grow it. Inversely, people struggling to become rich may not be aware of the skills they need to grow their money. Authors Tom Mathews, Steve Siebold, and Andy Horner compiled key aspects of finance in the book: How Money Works: Stop Being a Sucker, that are important to understand so that anybody can achieve financial literacy. 

Why should we strive to achieve financial literacy?

If you make and spend money, understanding how money works will ensure that you are managing your money in a way today that results in continuous growth that will take care of you long-term. Many of us work very hard for our money and take the money we earn and put it into a savings account dedicated to future plans. What if the interest rate on the account you are putting your money in is reducing the value of it? A strong foundation in financial literacy will give you the tools to decide where to invest because, depending on the age you invest, your future financial goals, and the interest rate-that money will double by the time you retire.


The Starter Tool for Financial Freedom

“How Money Works” provides insight into how you can take charge of your money and break free from the idea that financial ignorance is something to accept. It highlights discrepancies in the average person's spending habits. It describes how compound interest can grow your savings and how to utilize the Rule of 72 to calculate the time it would take for you to double the money invested based on the interest rate.

The book breaks down important financial concepts  into charts, tables, and real-world examples that make the content more digestible. In addition, the authors provide seven financial milestones to work toward in order to achieve financial security and independence. The seven milestones include things from how to set your family up for financial protection long-term to how to increase cash flow.


Final thoughts

If you want to take charge of your money and to stop being a "sucker" reading the book 'How Money Works' is a fantastic stepping stone to start building a foundation surrounding financial literacy. Tom Mathews, Steve Siebold, and Andy Horner created this book to give everyone the tools to achieve financial freedom. Teaching people about financial literacy has not been considered a priority for everyone but that does not mean it isn’t.


Works Cited

Mathews, T., Siebold, S., Horner, A. (2023). How Money Works-Stop Being a Sucker. Hammerheads Publishing. 



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