6 Ways Being Financially Smart Can Benefit You

Guest Post

People often shy away from financial education because they think they don’t have the time (or money!) to invest in it. The truth is, educating yourself about financial matters is a huge benefit. Being financially smart will save you from mistakes—and bring you back a lot of money.

Make Smarter Investments

Image via Flickr by 401(K) 2013

Being financially smart sets you up to make smarter investments. Check out the profile of Fisher Investments, you’ll learn a thing or two about investing your money wisely. Financial education makes people better able to manage their personal finances and investment decisions. Research has shown that some financial literacy makes you better at picking stocks and mutual funds with lower fees. And those are just smart investments.

Stay Away From Scams

Financial smarts aren’t just important for learning to choose the right stocks and funds when making investments. They’re also a measure of protection. If you have a handle on financial matters, you’ll have the ability to spot when things aren’t quite right. People who aren’t educated about financial matters are much more likely to fall into traps and scams than those who at least have some familiarity with how these things work.

Help Your Health

Financial abilities also give you benefits beyond the purely financial. Being wise with your money is a great help to your health, both mentally and physically. It prevents financial stress, which leads to tons of problems. For instance, people who experience financial stress turn to things like alcohol, and family financial troubles hurt a family’s well-being.

Research shows that children who live with financial problems have more psychological distress. When you’re under strain economically, your feelings about yourself decline, and that often leads to depression. So being financially wise, in avoiding money troubles, keeps you healthier in the long run.

Interpret Advice to Benefit Yourself

When you’re examining the financial advice that’s out there, you’ll notice right away that the experts often give conflicting—even polar-opposite—advice. That’s because they speak in oversimplified statements with the purpose of getting you to go with them. Many times, these pieces of advice you’ll see in the media are only half-true. Being smart financially lets you take this advice and see what is true. This means knowing when advice applies to your situation and when it doesn’t, which will again keep you out of financial trouble.

Secure Your Retirement

People who have a strong financial education are much more likely to plan and save for retirement. Financial education is key to long-term security. Defined contribution pensions mean that you must decide not only how to save, but also how to divide your retirement wealth. Learning about financial matters equips you to do so.

Get Wealthier!

Financial education is the best investment, as you’ll get back the biggest returns. Being financially smart prepares you to make the right choices in all aspects of financial planning—for example, those with greater financial literacy choose less costly loans like mortgages. Over time, people who have greater financial literacy gain more personal wealth than people who don’t.

The benefits are clear. Financial smarts go a long way in bringing in money.