“Knowing yourself is the beginning of all wisdom,” says ancient philosopher Aristotle. But it seems that most of us are not wise because we don’t know ourselves — our capabilities, and our personalities — fully. In other words, we are not self-aware. This is much true when it comes to the financial aspect of our lives.
Numerous statistics from social science studies attest to the poor financial knowledge of American consumers, and the significant downsides that occur from the lack of knowledge.
But what exactly does it mean to be financially knowledgable? When considering financial knowledge, many psychologists and public policymakers focus on financial literacy, defined as an understanding of basic economic principles and financial concepts such as how interest rates work, the effects of inflation on savings, the differences between individual stocks, bonds, and mutual funds, and so on.
But more than being financially knowledgeable, there is also another type of financial knowledge, and that is financial self-awareness (FSA).
Head over to Psychology Today to learn the benefits of having financial self-awareness.
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