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Financial Literacy and Financial Institutions

These sections discussing your money are part of a Legacy Community Health TeenWell™ collaboration with Richard Simonds and Tan Tidwell of the University of Houston-Downtown’s Financial Coaching and Economic Stability Lab.

So, what is financial literacy? Financial literacy is the ability to understand how money works.

Becoming financially literate will help you to apply different financial skills to your everyday life. These skills might include budgeting and saving, and managing your own money effectively so you don’t overdraw your bank account.


Why is it important to understand your finances?

Knowing how to budget and track your income and expenses is important for many reasons. Mostly, financial literacy allows you to become self-sufficient! Whatever your next step is – college, a trade school, or the workforce – you will definitely want to be financially stable once you’re on your own.

The term financial institution (FI) refers to banks and credit unions. These are companies that deal with your monetary transactions and financial services.

These services include handling your money, facilitating your deposits and withdrawals, and lending you money (loans).

Other services that you can find at a financial institution are investments, currency exchange, trusts, financial insurance, and other monetary transactions.