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The Lack of Financial Education in Today's Youth
By Vanessa Lang
Jan 29, 2012 - 12:20:37 AM

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It really is sad how little the youth of today knows about their personal finances. People grow up thinking that it's okay to have massive credit card debt, make huge payments on a car that they could pay for in full, or take out a payday loan when times get tough. These options don't have to be the only options, though it may seem so to those who have not been properly educated about finance. The increased number of these poor decisions only proves that we, as a society, need to make financial education more of a priority in our schools and in our lives.

Why is Financial Literacy So Important?

When a person has grown up to know about their finances, they will be able to use their credit responsibly, manage their money wisely, and truly be successful with their finances. A financially literate person understands how important it is to save for the long term, and they are able to weigh financial risks to make the best decision for their circumstance. A person who makes poor financial decisions when they are young could see some very serious problems in their future, and a lack of financial knowledge will cause that person to make poor decisions.

If a person wants a fighting chance of being able to retire, they need to know about personal finance. However, there are many people who don't think about retirement until it is too late. Not everyone wants to be forced to work well into their senior years because they can't afford to stop. These years should be spent relaxing and enjoying life, not working through the pain of arthritis. Being able to retire takes a lot of money, and if a person isn't financially literate, they may not realize how much they need to save.

Where the Apple Falls

With personal finance, the old saying, "The apple doesn't fall far from the tree," definitely stands true. Children tend to make the same decisions their parents make, whether the parents are trying to teach them or not. If the parent is constantly in credit card debt or takes out a payday loan once a month, chances are that their children will do the same. A child sees these activities and thinks that it's okay, so when they are struggling in the future, they will probably make the same poor decisions that their parents made. The child may even ask the parent for advice, and unless the parent has seen the error of their ways, they might even give their children the same poor advice.

Without another role model telling these children what they can do to prevent financial disaster, the only information they will receive about their personal finances is their parents. If schools take the time to help children realize the importance of saving money and the financial decisions that will help them in the future, we might be able to prevent some of these children from finding financial distress.

Finance in the Education System

Financial education should start as soon as these children can count. Saving money and spending it wisely can be taught as early as preschool. From there, teachers can introduce more difficult money related topics, like buying for value, credit cards, loans, saving for college, credit score, and the importance of making timely payments. These topics could be brought home for family discussion, which could help their home situation as well.

Not only should we be teaching children about personal finance in elementary, secondary, and post-secondary schools, we should also be giving this information to their parents as well. This will help prevent these children from making the wrong decisions because their parents will be able to give them proper advice in the future

Vanessa Lang

Vanessa Lang is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about payday loans.

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