“Financial literacy is such an important thing for kids to understand at a young age. Otherwise, you’ve got kids who get out of high school and are swarmed with pre-approved credit card offers and other things, and the next thing they know they are in trouble. So many kids have no idea how to intelligently handle money.”
~ Andy Heyward
Money, as we know, is significant in life. In terms of managing a lifestyle, putting food on the plate, or even availing of some basic necessities, leave alone luxury, money is the prime resource. Our GDP and employability depend on our earnings, savings and investment power. Well, that’s the essence of money. And since it dwells on every aspect of our lives, we need to be financially literate, and more so the youth. Habit builds when you are young and grows as you move on in life. When you understand the importance of money early on, you plan better avenues and inspire the next generation to use money effectively. Here are a few more reasons for financial literacy for the youth.
Why should the Youth learn about Finances?
Builds Responsibility Early on
One of the financial literacy benefits at an early age is that it builds a strong foundation in the youth. They become more responsible with money and understand the products in the market better. They cannot be easily deceived in matters of finance and proactively seek the prospects of investment in the future.
- Controls Spending Habits
The habit of saving pocket money in a piggy bank and using it for something relevant teaches youth to use money wisely. And this knowledge of the effective use of money empowers them. It prepares them to secure their future with the right financial decisions later in their lives.
- Results in Economic Growth of the country (with better investment and saving)
The economic power of a nation mostly lies with the working age group or the youth. So, with better financial habits such as wealth creation, expansion and budgeting, the economy of the nation and the world improves. It is hence extremely crucial to imbibe the importance of financial literacy early on.
- Helps Save up for emergencies
Life runs unpredictably and we must be prepared for the rainy days. A sudden health issue, or any other emergencies and even the necessity for higher education require savings. For a financially literate youth, it becomes easier to manage any emergency or urgent requirements, than for others who aren’t.
- Helps Save on taxes
There are many other individual benefits they can avail of when they know about finance. Information related to investment, deductions, exemptions, ways to source earnings, etc., can help them save taxes.
- Helps reduce Liability
One example of financial literacy is knowing how and where to spend. In a world of credit cards, most young people are in unnecessary debt. Financial literacy teaches them not to overspend on things they cannot afford. It makes them aware of how to utilize money efficiently.
- Better Financial Stability
How rich we get in life has less to do with earning power, but more to do with managing money. People can have massive wealth, but poor habits make them financially unstable. Knowing the best sources of investment and spending money on stuff that is useful in the long term guarantees financial stability to the youth and makes them secure.
It’s Never too Late to Learn
Just as our habits and mannerisms in childhood influence our personalities in adulthood, financial literacy in youth influences their financial decision-making as adults. It’s never too late to learn as proper education in money is extremely relevant at any point in life. However, the sooner we inculcate financial intelligence in the youth, the quicker we can progress to a better world.
Our intuition has a lot to do with taking forward our financial lessons in life. It helps us consciously overrule unnecessary spending and brings clarity while making decisions. Meditation boosts clarity by making us more aware of the consequences of our financial decisions. Join us for an effortless meditation session and see the changes in you.
Frequently Asked Questions on Financial Literacy
The importance of financial literacy is manyfold. From helping you make decisions on spending and investing, it enables you to progress in life with practical financial expectations.
Money plays a major role in life and the sooner we understand how to handle it, the quicker we achieve financial stability and feel satisfied. At a young age, we have many dreams, and financial literacy helps us not confine our dreams to spending on luxuries we do not need. Also, the knowledge helps us distinguish between needs and wants, pay for necessary expenses and manage our budget from our limited income.
Culture impacts us physically and emotionally, and similarly, it affects our financial decision-making. Culture builds a perspective on how to utilize personal finance and also how to budget, and track our spending habits.
