Why does the younger generation need Financial Literacy?
It is an ongoing joke on the internet that our school teaches children to do Quadratic Functions. And yet not how to balance a checkbook. While this is often being taking in jest, it is actually a serious problem. Consequently, today’s children grow up to be adults who earn money and contribute to the economy of the country. All without a sufficient financial literacy. Without the proper knowledge on how to manage your finances. It is possible for even the high-income individuals to get into to trouble with their credit. And managing money in general. Especially with the current online shopping culture, it is important for the younger generation to have a sense of financial literacy before they get too deep in financial problems even before they start getting a stable income.
What is financial literacy?
Before going into details, it is essential for everyone to have a clear idea of what financial literacy really is. To put it simply, Financial Literacy is the proper knowledge and understanding. Specifically of credit and debit management of your income and expenses in order to make financially responsible decisions as you go about your everyday lives. This helps one to avoid debt, to use their credit wisely and invest their savings in a way that there is an increasingly growing income which ensures financial stability in one’s life.
Why is it important for children to have financial literacy?
As it is mentioned above, today’s children are exposed to the world of financial transactions even from a young age. Therefore, they need to be educated to be accountable and responsible for their financial transactions. No matter how small they are, which will make them be even more responsible as adults. With the extreme exposure to the world of entertainment through the internet, the temptations to spend money are getting higher by day. There are many parents who have allowed their young adults to use supplementary credit cards out of convenience. This is why the financial literacy should be more common since reckless spending by a child can largely affect their parent’s income as well.
Another most important thing that requires financial literacy is the student loans. They come in high amounts and debts which take a long time pay off if not handled intelligently. Giving a solid understanding of finances from a young age will make the young generation understand the gravity of having a debt. Thus, encourage them to be smart when taking student loan decisions when they are older.
Giving a good financial education for children will also make them start saving their money at a young age. Thus, which will become a good financial habit when they become adults as well.
As part of an effort to promote the education of our younger generation in Financial Literacy, this article is the first in the series of financial themed articles. We aim to promote and educate about financial concepts and tools that can help you make more fiscally responsible decisions. Stay tuned for a weekly update that will surely prove to be enlightening. Contact us here for any inquiries you may have.