Financial literacy implies that a person is capable of controlling their money, rather than the other way around.
Expert Nurlan Beishevayev asserts that just as traditional illiteracy is eliminated through learning to read and write, financial illiteracy disappears with the mastery of managing one's money.
A key aspect of financial literacy is the ability to use available resources rationally, regardless of their size. To achieve this, one needs to acquire the appropriate knowledge. There are many educational materials and methods available online,” the expert adds.
Setting Financial Goals
Applying financial literacy in everyday life is the most important.
“Saving money may seem like a daunting task for many, but it can be turned into a habit. Regardless of income, one should regularly set aside a portion of funds, which will become the basis for future investments. It is important to have a clear plan and goal. If a person understands why they need to save, all other issues will resolve themselves,” notes Beishevayev.
For example, a person with an income of 50,000 soms per month should set aside a certain percentage of that amount. The size of the savings does not matter — the main thing is to adhere to this rule.
According to Beishevayev, teaching children financial literacy should begin at the age of 10.
“From an early age, children should be explained where money comes from and how it is spent. If funds are insufficient, it is important to say: ‘There isn’t enough, we need to save.’ Some parents believe that children should not be involved in financial matters, but this is a mistake. A child should grow up with an understanding of these aspects,” he emphasizes.
“From the age of 10, children should be given money to manage and taught how to spend it wisely. Discussing money without allowing a child to use it is like teaching to play an instrument without the instrument itself. Therefore, it is right for a child to have their own pocket money, an understanding of budget, income, and expenses,” the expert adds.
Recording income and expenses helps to control finances.
Fixed expenses may include rent, mortgage, loans, and utility payments.
Variable expenses may include costs for food, clothing, entertainment, leisure, household goods, and personal care.
By analyzing one’s finances after three months, one can understand how much money came in and where it was spent, as well as identify which expenses can be eliminated. Although this may be challenging, such an approach helps to reduce costs.
The 50–30–20 Principle
Another useful method is the 50–30–20 rule. 50% of funds should be allocated for essential expenses, 30% for variable expenses, and the remaining 20% can be saved and invested.
Think Before You Buy
Impulse purchases often occur under the influence of advertising, surroundings, and internal mood.
To avoid this, the following recommendations can be used:
If you have doubts about the necessity of a purchase, it is advisable to wait 24 hours or a few days.
Instead of going to the store, you can distract yourself with a walk in the park, visiting a museum, exercising, reading a book, or watching a movie.
Loans should only be taken in extreme cases:
- for purchasing housing,
- for necessary work items,
- for medical needs.
Financial literacy is not a way to get rich, but a tool for creating a stable and secure life. Only those who know how to manage their money properly can confidently plan their future. By starting to develop financial culture today, you will ensure peace of mind tomorrow.
