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Financial Wellness vs. Financial Literacy

When it comes to money management, two terms often surface in conversations: Financial literacy and financial wellness. They may seem interchangeable, but understanding their distinctions and how they complement one another can help you take meaningful steps toward a stronger financial future.

What is financial literacy?

Financial literacy is knowledge. It’s your understanding of key financial concepts that influence how you earn, spend, save, and invest. This includes skills like creating a budget, knowing how credit scores work, planning for retirement, and understanding the basics of borrowing and interest rates.

When you are financially literate, you can make informed decisions that align with your goals. It’s the foundation that supports every responsible financial action you take.

What is financial wellness?

Financial wellness, on the other hand, is about your overall financial health and stability. It reflects how confident and secure you feel about your financial situation, both now and in the future.

Someone who is financially well typically has manageable debt, savings for emergencies, and a plan for long-term goals, such as buying a home or retiring comfortably. It’s not just about knowing what to do with your money, it’s about feeling empowered to do it.

How they work together

Financial literacy lays the groundwork for financial wellness. You can’t achieve sustained wellness without a solid understanding of personal finance fundamentals. Likewise, increased financial wellness motivates you to keep learning, improving, and adapting as your life evolves.

For instance, learning how compound interest works (literacy) can inspire you to start saving early for retirement (wellness). Similarly, developing a budget and sticking to it improves both your knowledge and confidence with money.

Building both with MIT FCU

At MIT Federal Credit Union, we believe financial wellness begins with education. Our resources include workshops, personalized counseling, and online tools, and are all designed to help members strengthen their literacy while improving their day-to-day financial well-being.

By continuously learning and practicing good financial habits, you can create a balanced relationship with money that supports your goals and peace of mind. Remember, financial wellness isn’t about reaching perfection; it’s about making progress, one step at a time.

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