KEY TAKEAWAYS
- Financial literacy is the ability to understand and properly apply financial management skills.
- Effective financial planning, properly managing debt, accurately calculating interest, and understanding the time value of money are characteristics of being financially literate.
- The primary principles of financial literacy include learning how to budget, track spending, effectively pay off debt, and properly plan for retirement.
- Financial illiteracy contributes to people making poor financial decisions and becoming victims of abusive financial practices.