The Power of Financial Literacy
In our articles, we talk a lot about aspects of financial literacy, ranging from taxes to budgeting to building credit. But why should you care about financial literacy? Why do we bother writing articles about financial literacy? Glad you asked…
The majority of the population believes that having more money will solve all our financial stress. In most cases, this is not true. To a certain extent, your financial well-being depends more on what you do with your money than on how much you earn.
In its most basic definition, financial literacy is the ability to understand and use financial skills such as budgeting, investing, and saving money. But financial literacy is especially key to helping people become financially independent. As of now, 46% of Americans believe they won’t be able to retire comfortably and may even retire in debt (MagnifyMoney, 21). And in the last few years, credit card debt has been at its highest point ever. Unfortunately, only 22.7% of high schools in the US have financial literacy programs, which means the majority of young people receive little to no formal personal finance education (CNBC, 22). It is more important than ever for kids to learn basic personal finance. It can help you avoid making decisions early in life that could lead to long-term financial consequences.
The Impact of Financial Literacy
Additionally, an education in financial literacy allows youth to understand the value of money. Illiteracy in personal finance and a lack of understanding when it comes to money can lead to unnecessary expenditures, which you’ll regret later on or even right away. It also gives us the understanding to only loan what you can pay back because the last thing you want to do is get trapped in debt. Finally, an understanding of personal finance is empowering and allows you to invest, create, and increase your wealth.
Financial literacy is an essential life skill for engaging in modern society. Teens and young adults today are growing up in an increasingly complex environment where they will inevitably need to take care of their own financial life. However, with the correct financial literacy education and resources, teenagers may be empowered to be financially independent and successful. It can’t be overestimated how important it is to MIND YOUR MONEY!
