The financial education of youth is often taken for granted. Most of the time, it does not receive the attention it deserves even though it impacts every area of our lives in 2022.
If we do not teach our children about money, how can we expect them to handle their own money when they become adults?
For people to become financially literate, there must be a continual process from childhood to adulthood. But for some reason, even educational institutions do not acknowledge this.
We falsely expect individuals to learn how to handle their money on their own. For this reason, when it comes to financial education, there has to be a paradigm shift.
Why financial education is critical for youth?
The significance of financial education for youth cannot be overstated. Financially illiterate youth are first dangerous to themselves as they build bad habits in managing their money. As a result, they tend to fall into several financial traps without even knowing it.
Unfortunately, bad financial decisions are difficult to undo, and the price someone pays is high. Therefore, teaching people from a young age the essential information and skills they need to make better financial decisions is essential.
Consider some of the reasons why financial education is vital for our youth:
1. It is empowering
You’ve probably heard the expression “knowledge is power.” The same is true in financial affairs. The more financial knowledge you have, the more prepared you will be. On the other hand, a lack of basic understanding and information about money is detrimental for any young person.
What is the purpose of attending school to learn about science, math, history, and other subjects? The solution is to empower us in those areas. Similarly, money education should be prioritized alongside other disciplines. Young people must be educated about money and how it functions.
2. It prepares young people for adult life
Statistics show that young individuals who do not have adequate financial education grow up to be irresponsible adults, particularly with financial problems. They have no idea how to invest, can’t save enough money to buy a house, and sometimes have very low credit ratings.
These are not the actions of grownups who were educated about money management when they were young. Because they have a solid financial foundation in their youth, such people are able to make educated financial decisions in their maturity.
3. Helps build good financial habits
Young people with bad money habits like gambling have little or limited financial literacy.
Others might easily persuade them to join in additional bad financial behaviours. A person with a solid financial foundation will not be easily enticed to engage in activities such as gambling and Ponzi schemes.
4. Prepares them for emergencies
We are often caught up in emergency situations that necessitate big sums of money. Compared to someone who is financially illiterate, a young person who is financially educated finds it simpler to navigate and escape the situation.
In other words, financial literacy is vital for our young for a variety of reasons. They should be taught how to save, invest, budget, and handle debts on a regular basis. Failure to do so may result in a generation that is not just reckless but also impoverished.
Financial education in 2022 is something young people should strive for, especially during the volatile times we live in. Without proper money management and poor financial decisions, young people are often found unable to save money. This leaves them extremely vulnerable to emergencies and always financially dependent on their work. Additionally, their lack of savings does not allow them to plan their future like creating a family or buying a house. With an increasingly limited disposable income, financial education can help us make better financial decisions to save money cause every penny counts in the long term.