Final answer:
Personal financial literacy includes budgeting, investing, and using credit wisely, which are crucial for individuals to manage their finances and meet financial goals effectively.
Step-by-step explanation:
Personal financial literacy helps individuals manage their money in order to meet their financial objectives. It encompasses a variety of crucial skills and knowledge including budgeting, understanding the role of financial institutions, investing, using credit wisely, and employing insurance and other risk-management strategies. By mastering these skills, individuals can make informed and purposeful financial decisions that contribute to their personal economic success.
The institutions that offer various accounts are essential in money management. Budgeting is an indispensable tool for this process while investing early can greatly contribute to one's financial growth — often referred to as allowing their nest egg to grow. Furthermore, comprehending the costs and benefits of using credit is crucial for maintaining financial health, as well as understanding how financial institutions consider credit scores when lending money.