Understanding global economy is subject to what is most frequently referred to financial literacy. Financial literacy is, as remarked by Giesler & Veresiu (2014) a set of skills and knowledge which allow individuals understand, how to earn money, how to effectively spend and invest it, and, lastly, how and why donate it. It is the understanding how money works and how to be successful in financial respect. Financial effectiveness is critically important for a modern person, and thus I have certainly given some thought to the way in which I would be able to improve my financial literacy and improve my knowledge of how finances work globally.
Certainly, my first step would be reading specific literature. There are books, which explain financial concepts and processes to those who possess little knowledge in the field. However, certainly, it would be important to select a high quality book. There are many books “for newbie’s”, which do not meet any reasonable standards of quality. At the same time I personally do not believe myself to be an absolutely financially illiterate person. I do possess understanding of basics, and thus would like to build on this basis. Thus, I would require a professionally written book. In order to find one I would certainly consult a professional. It must be somebody who not only professionally deals with finances but is teaching finances to non-professionals.
The next step which seems to be reasonable to me is reading financial magazines. It is important not only to develop the base, which would allow understanding how money works both locally and globally. The point is that the manner in which they work is constantly changing. This is why it is critically important to be constantly updated on the most important news regarding finances, new developments in the technological solutions, which are related to finances. Such technologies appear quite often nowadays and this is why it is reasonable to always keep an eye open for the news in this field.
Another important step to take is to practice. I strongly believe that it is important to “play around” with finances prior to taking serious steps. Investing small sums of money, arranging minor enterprises to earn money, taking risks and researching the processes are critically important for developing effective financial skills. Knowledge of theory is absolutely necessary but not sufficient for effective financial activity.
Alternatively it may be helpful to attend some financial training. Such are available nowadays. Moreover, it is possible to attend virtual trainings without having to physically go anywhere. However, just as in the case with books, it is important to choose an effective training taught by a professional couch. Investing into such sort of education would be, probably, my first experience of effective investment.
There are, probably, other alternative methods of obtaining financial knowledge and skills. However in general it is possible to describe them all through a general scheme, consisting of three major steps: choosing source of knowledge (a book or a course), then active development of theoretical base through reading the book or attending the selected course, and, lastly, practical application of this knowledge. The scheme is quite universal and would definitely work for any set of skills. However in case of financial literacy it is particularly important not only to follow this scheme, but also to keep one’s knowledge updated, as discussed above, by means of following financial news through trustworthy media. Otherwise the knowledge and the skills may very easily get outdated. However, a person who applies financial knowledge and skills practically will in any case follow the news and the most important developments. Otherwise the very first mistake may cost them too much.
- Giesler, Markus; Veresiu, Ela (2014). “Creating the Responsible Consumer: Moralistic Governance Regimes and Consumer Subjectivity”. Journal of Consumer Research 41 (October): 849–867.