Financial literacy is a serious matter in this Digital Age. It shouldn’t just be taught in school but should also be taught at home, even for young kids.
What is financial literacy?
It is an awareness of how money should be spent and managed, and how it can be used in ways that would make a person more financially secure in the future.
How important is financial literacy to everybody?
Learning about it has a huge impact to us all.
First, it helps us understand the value of money so we can handle our finances better.
Being financially literate will teach us the importance of budgeting and saving. We won’t just waste our money for very expensive gadgets, clothes, cars, bags, shoes and other things which we don’t really need. We can better understand between our wants and needs and can prioritize things according to their essence in our daily lives.
Second, it saves us from acquiring too much debt.
Acquiring too much debt can put us in deep trouble. If we are financially literate, we can determine how much loan we can afford to pay, especially if we have bills for mortgages and insurances. This will also train us to prepare for our children’s education and their future needs, as well as for medical and hospital bills, without having to lend money.
Third, it allows us to impart our knowledge on financial literacy to the young generation.
To be financially literate will help us secure the future of the next generation. We can teach them how to budget and save to prepare for years ahead. They can also realize even at their young age how their parents work hard to provide for all their needs. Helping them become aware of the importance of financial literacy will likewise teach them discipline and respect for their parents. This will also train them to understand that eventually, they should be financially independent. They will be more responsible and street-smart.
Fourth, financial literacy helps us prepare better during times of emergency.
We encounter moments of emergency wherein we need cash or a huge amount of money to survive or overcome our monetary and emotional crises. In times like this, being financially literate will save us the trouble of borrowing money that will just bring us more problems.
Fifth, it enlightens us to invest and create income streams.
Investing in stocks and creating income streams besides our salaries are results of financial literacy. Relying on just one source of income will keep us in a situation where we always make both ends meet. Creating multiple income streams will give us the confidence that we can survive financial crises.
Sixth, it gives us the opportunity to help boost our country’s economy.
When we invest a percentage of our money, say, in stocks, we help the company we invest in to create more jobs. This means better employment rate and better contribution to help build a more progressive nation.
Seventh, financial literacy gives us the privilege to help the less fortunate.
It provides us the opportunity to share our blessings to the needy. This is because we are able to spend our money more wisely and we get to save a percentage of it for investment, business, retirement, to name a few. We can then provide a certain amount too of our savings to those who are in dire need of help. Helping others give us a sense of fulfillment that is definitely priceless.