Achieving basic personal financial skills is one of the most important things you can do to live a healthy, happy and financially secure life. Your level of understanding around the fundamentals of budgeting, savings, debt and investing will impact every part of your life and can mean the difference between prosperity and poverty. With how important these basic life skills are, it has become imperative that this necessary life skill must be taught in schools. Here are some reasons why:
Money touches everything
When making career choices, buying your first house, getting married, having children—finances play a massive role in each of these life events. And it’s not just the major ones; finance is a part of our everyday life. Whether it is where we eat, what we buy, travelling, going out with friends or negotiating prices, every day we are faced with financial decisions. Most people lack the experience and education to make these decisions – big or small. This is one of the reasons why it should be taught in schools. When it comes to financial education in schools, many adults feel that more should be done to help students get a head start.
Lack of financial knowledge has painful consequences
Finances are understandably one of the major causes of stress for adults. Everyone can relate to this stress; even the wealthiest people have felt financial pains at one time or another. Debt and/or a lack of savings can cause considerable hardship in a person’s life. And it doesn’t just cause daily stress. Financial problems can lead to divorce, poor health, depression, and bankruptcy. So, it is imperative to have the requisite knowledge to prepare one against these life events.
Financial literacy leads to a healthier life
The positives that come with having a financial education are undeniable and numerous, such as:
• It promotes good savings habits. Just imagine if your child came out of college and started immediately saving for their future. Imagine if we all had.
• Budgeting teaches awareness and responsibility. If someone has a budget that they actively manage, it forces them to look at their spending. They are aware of how much they have available, and this leads to making better spending decisions.
• Smart financial decisions positively affect one’s credit score, which impacts their entire life: getting a job, applying for a loan, renting an apartment, buying a home or car, getting insurance. Having an excellent credit score means saving thousands and thousands of naira in interest payments over your lifetime. More jobs, more money and less debt are good for the economy as a whole.
• Understanding money management leads to financial health and positive attitudes around money. People’s attitudes around money can be instrumental in shaping their character, plus promotes the desire to give back.
Where else will they learn it?
Many adults lack financial knowledge because it is not taught in schools. So, they turn to alternative sources of money advice and information. There are several blogs, websites, podcasts that can be a source of financial literacy. However, a practical and hands-on approach remains the key.