Am I Financially Literate?

Money—whether we like it or not—plays a big role in our lives. We earn it, we spend it, we try to save it, and sometimes we stress about it. But how much do we really know about managing our money wisely?

April is Financial Literacy Month, and we want to take this opportunity to review and upgrade your financial literacy. So, how financially literate are you? Let’s find out.

Do You Know Where Your Money Goes?

The first step to financial literacy is understanding your spending habits. Do you reach the end of the month wondering why your bank account is empty? Or have you created a budget to help you understand how much you earn, how much you spend, and how much you can save?

Do You Understand Debt?

Debt isn’t always a bad thing, but can you manage your debt? There is good debt, which allows you to achieve meaningful growth in your life, such as a mortgage or a car loan. And there is bad debt, which often has extremely high interest rates and which was taken out for non-essential items, like credit card debt or borrowing to buy designer clothes. Do you understand your debt service ratio? And do you avoid taking on too much debt, especially bad debt, which can drain your finances and increase your stress levels?

Do You Have an Emergency Fund?

Life is unpredictable. Medical emergencies, car repairs, or unexpected job loss can throw a financial curveball your way. An emergency fund—typically three to six months’ worth of living expenses—can be a lifesaver. If you don’t have one, start small and build up over time.

Do You Know How to Grow Your Money?

There’s saving the money you already have and then there’s growing your savings. If you park all your savings in a bank account, even a savings account, chances are you aren’t earning as much as you can. Investing doesn’t have to mean monitoring the stock market and knowing when to buy or sell. With easy-to-understand, low-risk savings options like fixed deposits, you can really make your money work harder for you.

 Are You Prepared for Retirement?

Whether you’re twenty-five or fifty-five, retirement planning is crucial. The sooner you start, the easier it will be to accumulate enough money to allow you to maintain your lifestyle when you stop working. You can also consider an annuity­ – a financial instrument designed to provide you with a steady income stream upon retirement.

 Do You Pay Unnecessary Fees?

You’re supposed to pay your credit card bill by the middle of each month. But you usually forget and now you’ve got to pay a late fee on top of the bill. Financially literate people try not to pay any more than they have to. That means they cancel streaming services or subscriptions they’re not using and they pay their bills on time to avoid penalties.

 Do You Have the Right Insurance?

Do you have medical coverage, life insurance, and coverage for your home and car? Insurance protects you from major financial setbacks, ensuring you don’t wipe out your savings when unexpected events occur. Furthermore, if you’ve had the same insurance coverage for a while, it may be time to review your policies; you don’t want to pay more than you have to and you don’t want to be under-insured!

 Do You Understand Taxes?

Are you paying too much tax? If you’ve got an approved annuity plan, if you’re a first-time homeowner, or if you donate to a charitable organization, you’re probably eligible for tax deductions. Or are you paying too little in tax, and exposing yourself to penalties and future financial distress? If you want your questions on taxes in T&T answered, check out the Maritime Blog: Tax Season FAQs.

Are You Continuously Learning?

Financial literacy isn’t a one-time achievement—it’s an ongoing process. The good news is, if you’re reading this blog, you’re taking steps to understand money management. If you really want to be financially literate, commit to learning about how to be a better saver, a smarter spender, and how to safeguard your financial future.

 How Did You Score?

If you answered ‘yes’ to most of our questions, congratulations! You’re on the right track toward financial literacy. If you answered ‘no’ to a few (or most!), don’t panic—it’s never too late to build better financial habits. And remember, even the most financially literate people will make mistakes from time to time. But know this: you are not alone. You can always talk to an agent to help you develop a financial plan that’s tailored to your own unique needs.