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Financial fitness and our concentration on maintaining financial wellness should be regularly practiced. Financial Education is a necessity. It provides a clear understanding of how money works and how it should be managed. Decisions about money affect our daily lives. We are faced with questions: Should I go to a University or a Trade School; use a credit card or pay cash; spend today or save for tomorrow? Skills in personal finance are necessary to manage real world situations. Knowledge and confidence is required for asking the right questions in order to make an informed decision. Financial education provides knowledge and it increases confidence. Everyone needs financial education, and it should be taught to toddlers as well as to senior citizens. Of course, a preschooler can’t be expected to complete a budget. They can, however, be taught the money lessons in elementary terms. They are constantly asking for snacks and small toys. Those times that can be used as teaching opportunities. For example, if a bag of chips cost $.35, three dimes and a nickel can be used as an illustration. It allows them to visually see the value of money and is the first step in budgeting. Older children want more expenses toys but this same principle can inspire them to budget and save for items. This is especially true for high school students. Their “wants” are nearly as expensive as their parents. It’s surprising to see the type of cars parked in a high school parking lot. It’s not uncommon to see high dollar vehicles. I often wonder “who’s paying for those cars?”. If expensive luxury cars for teenagers automatically required getting a part-time job, it could translate into a lifetime lesson in personal finances. If a student worked 15 hours per week they could easily net enough money to cover vehicle and transportation cost. This money can be used for expenses such as insurance, gas, maintenance, or applied toward the car payment. This strategy provides the youth with a real world example of budgeting.
These teaching opportunities are imperative in preparing students for the high cost of college tuition. According to the Wall Street Journal, the class of 2016 had a record high level of debt. The average graduate has student loans of more than $37,172. Therefore, it’s imperative students compare their projected income upon graduation to the expected debt amount. The $37,172 is an “average” figure. Many students have amounts in excess of $100,000! This amount of debt will require careful planning and it is suggested that students not accept total debt that will be higher than their expected annual salary.
Obtaining knowledge and seeking financial education should extend beyond the youth. Adults should also be well versed about their finances. It’s difficult to properly manage a household if one is constantly worried about making financial ends meet. A one-on-one financial coaching session provides an individual action plan for setting and achieving goals. It can relieve the stress of money worries.
Financial education strengthens the economy by producing informed, educated, and responsible consumers. Education raises awareness and increases the potential for individuals to become financially self-sufficient!
All content on this blog is for informational purposes only.