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
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 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.