Financial literacy is the ability to understand and manage your money effectively. It involves knowing how to budget, save, invest, and make informed decisions about spending. By being financially literate, individuals can avoid debt traps and make choices that lead to financial stability and growth. Having financial literacy also means being aware of important concepts like interest rates, credit scores, and inflation. This knowledge helps people plan for the future, whether it's saving for a house, preparing for retirement, or funding a child's education. Ultimately, financial literacy empowers individuals to take control of their financial lives.