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The Importance of Financial Education

Guest post by: Karen Newman

Article Overview: The recent global economic downturn has served to highlight our deficiencies in the area of financial literacy and has shifted focus to the need for financial education.

The Importance of Financial Education

The definition of financial literacy is “having the knowledge, skills and abilities to undertake responsible economic and financial decisions and actions with a requisite level ofcompetence." The recent global economic downturn has served to highlight our deficiencies in this area and has shifted focus to the need for financial education.

Self Assessment Tools

A simple questionnaire that establishes your current financial status is a great place to start. This will provide you with a greater understanding of what it is you do know and what it is you need to learn about money management. When properly structured, self-assessment tools can assist you to develop your personal financial goals and to acquire a better sense of what you will need to make more informed financial choices.

Money Management Basics

Mastering money management basics is crucial. Learning how to formulate and live within a monthly budget, building savings and creating wealth, planning for future financial needs, understanding how insurance products work and taking measures to combat identity theft and other fraud are all key areas that should be addressed.

Components of Financial Education

· The importance of starting now!

· Time value of money and compound interest.

· Planning and budgeting.

· Credit and debit.

· Investment and savings.

· Implication of taxes.

· Fraud protection.

The importance of receiving a good financial education, at any age, cannot be overstated. Get started along this path and continue to build momentum toward a future of financial freedom for you and your family. Financial literacy, and a financially literate society, is necessary to ensure stable economic growth.

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Article Tags: economic downturn, financial education, financial literacy



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