Do you rank financial literacy high on the list of important things to know? If you do, you are not alone. Over 60 percent of Americans with more than a quarter million dollars to invest agree. So many are never offered any formal training in the realm of finance and make the mistakes that prove it. There is a growing need for financial literacy education, not only in America but around the world.
Most people who buy a boat, a car, or a home, among other expensive items, do not pay cash. Instead, they borrow money and pay that money back with interest. Amazingly, many of these people are not aware of the interest rate or how much that rate is costing them. Too many people are simply happy to have a payment that fits their budget rather than understand how much that payment really hurts their bottom line and why.
Young people are not offered a formal education on things like credit, credit ratings, and the way these items affect their lives, both short term and long term. They make critical mistakes and use poor judgment and find out later the only way out is through bankruptcy. They are not alone in their responsibility for these failures.
Too many people leave high school or even get a college degree without any true appreciation for how finances work. They have no concept for the value of saving money. Programs offered through a bank or their employer are completely foreign. They may actually contribute some to savings but have no real understanding of the variety of options available.
And this is not a problem caused by the use of calculators or computers. Even with these devices and their ease of use, too many people have no idea how to balance their bank account, whether they have access to a computer or not. Determining how much to tip the waiter has become a challenge!
The tide is turning however. There are now programs offered to educate the old and the young about the essentials of finance. Some are government programs. There are others offered by private institutions as well. There are even board games kids and parents can play together that help to teach financial literacy.
If you are a parent do your best to make sure your kids understand the basics. If you don’t understand the basics, find a program and get started. You may be surprised to know how much money you could save and how much more you could offer your family with just a little Financial Literacy Education.
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