Financial literacy is important no matter what point of your life you’re at. However, the younger you begin learning how to manage your finances, the better you’ll be at managing money throughout your life. There are studies that show financial literacy education has a significant impact and affects students far past their school years. Students in high school who take at least one financial literacy class show themselves to be much more financially responsible as they grow older. With far too many Americans shouldering hefty credit card debt and the rise of immense students loans, it’s more important than ever before for people to understand their financial choices.
Better understanding of life choices
Nearly any aspect of life requires some kind of financial knowledge and means. If you want to go to college, buy a house, get married, have kids, etc., you’re going to be spending money. There are options to take out loans for nearly anything, but is that the best option for you? When you’re researching student loans or working on purchasing your first car, understanding basic financial ideas like interest rates, down payments, and financing is vitally important in order to make the best financial decisions. Being financially literate helps you make informed choices on these topics.
Successfully avoid debt
Most people living in the United States have some kind of debt and that number isn’t going down. People eagerly charge credit cards for purchases, slowly paying off the bill over years and spending more than they would have initially thanks to huge interest rates. Taking out loans for college or a mortgage simply adds to this debt. With financial literacy, it makes it much easier for adults to avoid excessive debt and helps educate them on how to strategically pay off any debt they do accumulate.
Find greater happiness
While money cannot buy happiness, concerns over money cause excessive stress. The number one topic couples argue about is money and people who have to live paycheck to paycheck often feel stressed out, wondering if they’ll be able to pay their bills each month. With financial knowledge, it makes becoming financially secure much easier and lowers levels of stress. WIth less stress, you’ll lead a healthier life. You might not have as large a house or as nice a car as other people, but you won’t be using up all of your money paying off debt you didn’t need to have in the first place.
Increase monetary gains
The better educated you are about finances, the more likely you are to have financial security and increase monetary gains over your lifetime. Understanding the basics of investing and the importance of saving for retirement leads to people being more financially stable as they get older. If you understand the importance of making a fair salary, you’re more likely to advocate for a great starting salary and fair pay increases.
Create a secure future
Like I mentioned above, students who are taught financial literacy early in life are more likely to understand the importance of many financial decisions, such as saving for retirement. The younger someone realizes they should be saving up for their future and making wise purchasing decisions, the sooner they’ll start investing and saving. Planning for your future early helps create a secure future that leads to less monetary concerns.