When the question of who needs personal financial education comes up, the people that come to mind are those who probably deal who business or those seeking to invest. Most people would not be bothered with any financial education, and they are always under the false illusion that they are in touch with their finances. Others don’t see how relevant it is to their daily lives. But the fact remains that financial education goes beyond the aspects of business and investments.
It is not always about statements of financial position and statement of profits and loss and other comprehensive income; there is a whole different perspective on financial knowledge. Financial literacy is an important aspect of life by the fact that all people use money. It is essential especially in the early years of one’s life as it molds and influences minds to manage finances effectively. With that in mind, this article will consider why personal finance education is important to everyone.
1) It Builds Financial Literacy
Financial education builds financial literacy. Financial literacy can be regarded as that knowledge that enables one to make responsible decisions involving money. It can help one to manage their debt, account for expenditures and incomes and also utilize various services that revolve around money. Such services may include bank accounts, use of credit and debit cards. When one undertakes financial education and indulges on research topics revolving around it, the culmination of this education is financial literacy.
2. It Helps Build Knowledge of Financial Products
Financial education enables you to know various financial products. The rationale for financial education in the contemporary world is due to the increasing complexity of the financial market. Many people are seeking financial products without express knowledge of how they work. For example, retirees are taking on pension schemes which they are ignorant about. Business people are borrowing from lending institutions without any knowledge of debt management.
Consumers have been left without guidance on financial products. When comparing with the past, professionals always guided consumers of financial products on the best course of action. They also helped them plan. However, most consumers are at present making all these decisions by themselves. This leaves them susceptible to risks that revolve around these financial decisions. It is no wonder that people are heavily in debt nowadays. It is the same reason as to why businesses are becoming increasingly insolvent.
Read more: https://www.techbullion.com/why-personal-finance-education-is-important/