Financial literacy is the foundation of financial success.
You don’t need a graduate degree in finance to avoid overdrafting your checking account or going into credit card debt, but avoidable mistakes, unhealthy borrowing and missed opportunities are all but certain if you don’t understand the basics of credit, interest, budgeting, banking, taxes, saving and investing.
The good news is that if your financial knowledge isn’t up to par, it’s not too late to learn your way into prosperity — and a new GOBankingRates study of more than 1,000 people is proof.
Can Financial Literacy Cure Money Mismanagement?
Nearly half of the study’s respondents — about 44% — said they never struggled with money due to a lack of financial literacy. On the other end of the spectrum, 36% say inadequate knowledge has held them back and that their finances are still in disarray because of it.
However, nearly one in five — about 19% — had previously struggled but have since recovered after gaining a better understanding of personal finance.
Young and youngish people between 18 and 44 were more likely than older people to have righted a faltering ship through improved financial literacy, and men were more likely than women to say the same.
However, one overarching theme prevails across all demographics: If you’re struggling financially, committing yourself to learning more about the ins and outs of money is the surest way to improve your chances of cutting spending, eliminating debt, building savings and creating wealth.
Another incentive to learn as much as possible about money is that personal finance knowledge transfers seamlessly to business pursuits. GOBankingRates spoke to a successful entrepreneur who applied what he learned about personal finance to his company’s bottom line.
An Entrepreneur Turns Personal Finance Knowledge Into Business Acumen
Daniel Meursing is the CEO of Premier Staff on Sunset Boulevard in West Hollywood, Los Angeles. When he founded the luxury event staffing agency in 2018, he had plenty of industry knowledge, high-level connections and no shortage of ambition — but upon going into business for himself, he realized that his commitment to financial literacy might have been his most important asset of all.
His company has worked with everyone from automotive giants like Bentley and Ferrari to entertainment powerhouses like Netflix and The Oscars — and Meursing’s efforts have helped him build a comfortable amount of wealth along the way.
But he wouldn’t have been able to manage his business’s finances so successfully had he not taken ownership of his personal finance self-education. Although, that’s not to say his journey from monetarily ill-informed to financially savvy was easy.
“I understand that becoming financially literate can be overwhelming, but I believe it’s a crucial step toward achieving financial success,” said Meursing.
It Can Be Hard To Know Where To Begin, but Just Take That First Step
As with anything, the first steps toward financial literacy are the hardest. With so many complex subjects, potential sources of knowledge and conflicting information, it can be hard to even know where to begin.
“For those who are just starting their financial literacy journey, I recommend seeking out reputable sources of information, such as well-established financial publications, educational resources provided by trusted financial institutions, and books written by experienced professionals in the field,” said Meursing, who leveraged his real-world network while also leaning on academic sources.
“When it comes to formats, I believe the best approach is the one that resonates with your learning style. Some people prefer reading articles or books, while others may find podcasts or video content more engaging. I found a combination of reading financial publications and seeking mentorship from successful entrepreneurs to be the most effective way to build my financial knowledge. I’ve had the opportunity to observe and learn from financially successful individuals across various industries.”
No Network of Mentors? Follow a Few Experts Online (Just Make Sure They’re Worth Following)
Meursing had the luxury of knowing experienced professionals willing to share their cumulative knowledge. But even if you don’t know suitable or willing mentors to learn from in real life, many credible experts share their knowledge online — just don’t get roped in by the many pretenders.
“While social media influencers and celebrity money experts can offer valuable insights, it’s essential to verify their credibility and cross-reference their advice with other reliable sources,” said Meursing. “Avoid get-rich-quick schemes and anyone who promises guaranteed returns or overnight success. Instead, focus on sources that provide practical, actionable advice grounded in sound financial principles.”
Applying Personal Finance Knowledge to Business Pursuits
One thing that makes financial literacy so empowering is that you can apply it to any facet of life that involves money, like investing, borrowing, or, in Meursing’s case, business.
“As I built my financial literacy, I realized that the most important step was applying what I learned to real-life situations,” he said. “When I founded Premier Staff, I put my knowledge into practice by creating a lean business model, keeping overhead costs low, and reinvesting profits back into the company.”
All three of those strategies are just core personal finance concepts rebranded for business.
- Budgeting becomes creating a lean business model.
- Spending within your means becomes keeping overhead costs low.
- Saving for the future becomes reinvesting profits back into the company.
“This approach allowed me to bootstrap the business with just $4,000 and scale it to serve high-profile clients like Louis Vuitton, YSL, Justin Bieber, and Lady Gaga,” said Meursing.
Another one of the most foundational personal finance concepts is creating a spending plan. Here, too, Meursing retrofitted it for business applications.
“One of the key financial principles that has guided my success is the importance of understanding and managing cash flow,” he said. “By prioritizing revenue generation and maintaining a minimum profit margin, I’ve been able to make informed decisions about when and where to invest in growth opportunities.”
Hopefully, You Like Learning — Because Your Education Never Stops
Different experts recommend different starting points. Some say to pick a topic like credit or compound interest and start there. Others suggest browsing overarching primers from your bank or favorite financial publication that cover several topics in one quick read.
But all agree on one thing — no matter where you start, your financial education never ends, and you should never stop being a student — and Meursing’s success is the proof.
The more he learned, the bigger his business grew, and the more he had to learn again.
“Financial literacy is an ongoing journey, and it’s crucial to stay curious and adaptable,” he said. “As my business grew and I began working with luxury brands like Veuve Clicquot, I continued to seek out new knowledge and insights to help me navigate the challenges and opportunities of scaling a company. In today’s rapidly evolving financial landscape, it’s more important than ever to stay informed about emerging trends, technologies, and best practices. By committing to continuous learning and surrounding yourself with trusted advisors and mentors, you can build the financial literacy needed to make sound decisions and achieve long-term success.”
