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Financial Literacy- Financial literacy refers to the ability to understand…
Financial Literacy- Financial literacy refers to the ability to understand and manage personal finances effectively. It encompasses skills related to budgeting, saving, investing, borrowing, and managing debt. 
Budgeting
Tracking income and expenses, individuals can identify areas where they may be overspending or underspending
Budgeting is the process of creating a plan or a spending plan that outlines how an individual or a household will allocate their income to cover their expenses.
Budgeting involves balancing expenses with income, which means that the total amount spent on expenses should not exceed the total income earned.
Investing
Investing refers to allocating funds towards financial opportunities, such as shares, and properties with the aim of generating a profit or a return on the investment.
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Banking Terminology
Income
Income refers to the money earned from various sources such as employment, investments, or business transactions, and is essential for meeting one's basic needs, and financial goals, and improving their standard of living.
Earned Income
Earned income refers to the money earned from employment or self-employment. Money made from working for someone who pays you
Expenditure
Expenditure refers to the amount of money spent on goods and services. It includes all types of spending, such as purchases of food, clothing, and housing, as well as payments for utilities, transportation, and other necessities.
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Interest and Types
Interest is the cost of borrowing money, usually expressed as a percentage of the amount borrowed.
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Saving
Saving is crucial for achieving long-term financial goals. By regularly setting aside money, and ultimately achieve financial security.
It is essential to save some money from the income that one has so that it can be used in the future when needed.
Overall, financial literacy emphasises the importance of saving as a foundational practice for achieving financial security, stability, and independence.
Debt
Debt is the amount of money that a borrower owes to a lender, which can be incurred through various forms of borrowing
Emergency Fund
An emergency fund is a reserve of money specifically saved for significant and unforeseen expenses, such as job loss or high medical bills.
Time Value of Money
The Time Value of Money (TVM) is the idea that having money now is more valuable than having the same amount in the future, as invested money has the potential to grow over time. Money obtained later is less valuable because it has less time to appreciate through investments.
Banking Terminologies
Credit Card
A credit card is a payment card that allows the cardholder to borrow money from a financial institution to make purchases, up to a pre-approved credit limit.
Debit Card
A debit card is a payment card that allows the cardholder to access funds from their own bank account to make purchases or withdraw cash.
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