Financial literacy: Improve your ability to recover and build a better future

October 2020 – 5 minute read

What’s in this article:

What’s financial literacy?

Financial literacy is a term used to describe a person’s ability to understand and apply financial skills. These include budgeting, understanding interest rates and understanding debt management. When it comes to being the master of your financial destiny and feeling confident to make financial decisions, building your level of financial literacy will help, no matter what life throws at you. 

Why it’s important

Most of us want to make smarter choices about what we do with our money, and we want to feel confident we’re going to be ok. Understanding how your finances work helps.
 

One tip to keep in mind is how the two core principals of saving and debt can make a difference.
 

Having more savings than debt is a good place to be, but it’s not always possible. This is where knowing how to manage your money to meet your debts becomes important. One way to do this is to have a budget. A budget helps you plan and see where you can save or reduce your spending so you have enough money coming in to cover your bills and pay off any credit or loan debt on time. It can also help you see how you can reduce your debt, which is a good thing.
 

Unsurprisingly, the more financial knowledge you have, the more you may understand what’s happening in the economy both in Australia and overseas, and how changes may impact you.
 

There’s always more you can learn if you’re looking to get on top of your finances. Sign up for a financial literacy course online or try out some of our resources on the Davidson Institute to help build your skills.

Who’s the Davidson Institute and how can they help

Powered by Westpac, the Davidson Institute provides online financial education through expert resources and presenters. Learn the skills to improve financial literacy and build your confidence with free Davidson Institute financial education resources. 

Try these interactive tools

Money diary

Track your expenses and where your money gets spent in a Money diary like this one. Record everything you spend your money on over a period of time. Once that’s finished, go back and check out where your money is going. You can then build your new spending patterns into your budget.

Find out more about the Money diary here. You may also want to set up your own Money Plan or budget. It helps you save for the things you want and improves your financial security.

Budget planner

Deciding on a budget and sticking to it is a great way to save money but it can be difficult to do. A simple tool that has a step-by-step process which helps you build a budget suitable for you and your financial situation might be the answer. Budgeting is a habit. It helps you keep track of your money, make spending changes, and save for future goals.

Download our Budget planner (PDF 82KB)

Managing money guide

Life happens and when it does your budget and financial plan can get derailed. To help you understand your current financial position and put the steps in place you may need to get your finances back on track, we’ve developed a Managing Money Guide. 

Download our Managing money guide (PDF 2MB)

Cost-cutting checklist

Maybe your income has been unexpectedly reduced or you’re actively looking for ways to save, this Cost-cutting checklist has some great ways to think about how you can reduce everyday expenses.

Download our Cost-cutting checklist (PDF 216KB)

Talking finances with your partner

Money conversations can be hard but important. We’ve partnered with relationship experts Interrelate to build a couple of money quizzes that’ll get you talking together about managing your money in a healthy way.
 

If you want to understand your financial and personality profile, try the Understand Your Money Habits quiz. Maybe you’re curious to see how you and your partner view money? The Sharing finances quiz can open up the conversation.

Financial first steps in Australia guide

Designed for those who have recently migrated to Australia, the Financial first steps in Australia guide provides information on the financial system in Australia and useful hints and tips on how to manage money in your new home.
 

Find out more about Financial first steps in Australia

Join these simple money management events

Learn more about finance from experts. The Davidson Institute’s regular online financial education events feature guest experts and presenters who explain the different aspects of financial management, such as budgeting, buying your home, managing your business or side hustle, the importance of cash flow and much more.
 

Check out the Davidson Institute for upcoming webinars.

Videos

We also have videos covering personal finance, business finance and general money management, you can watch.
 

If you’re looking to become more financially savvy, try out Planning for your Financial Future, which covers:
 

• Budgeting
• Borrowing
• Investing
• Managing your super
   

View these and more on the Davidson Institute.
 

Managing your money to create the future you want has a lot to do with building your financial literacy. Improve your knowledge when and how you want with tools and resources developed for you by the Davidson Institute.