Alimah Fagbenro
March 1, 2024
What is financial literacy? Financial literacy helps you understand how to make good money decisions, including subjects about budgeting, saving, and investing. This will allow you to manage your finances without the assistance of an accountant or advisor. These high school courses are increasingly becoming a requirement, currently in 25 states.
Most teenagers are becoming adults without any knowledge of finance and don’t know how to handle their money. It's not their fault, most parents aren't always as welcoming to sharing their finances. With only half the country teaching a literacy course, it's not a shock. Young Americans alone owe over 1 trillion in debt because of financial decisions they made when they were younger. They’re applying to high-cost colleges for degrees they can’t afford to pay back or taking out unnecessary loans for cars with high APRs. This will threaten your ability to have any security because of debts and missed wealth-building chances. They’re constantly borrowing money without thinking about the consequences' severity when they can’t repay it, building a lower credit score.
These courses help you understand financial risks. Taking time to find further knowledge about the gamble that comes with insurance and deductibles. The drawbacks of a lack of security include damage. Explore and learn the different methodologies you could use to cover huge expenses like college. You could consider investing in stocks and examining the pattern of their growth. You understand how to handle paychecks, whether taking them to the bank or withdrawing them using the app. If you want to pursue the entrepreneurial root, understand the economy's function to help your business flourish.
Then, you can learn to budget to have enough money to save for future goals that’s enough to cover a down payment for a house or car. It’s important to save; you don’t want to be restricted to living paycheck to paycheck because you have no other options. Savings cover unexpected costs that occur in your life and should keep you protected. You could also put those savings into a CD or certificate of deposit, which has a better interest rate than a typical savings account that doesn’t accumulate wealth as fast. Budgeting will also help you determine the difference between needs and wants for expenses. Maybe you don’t need that extra monthly subscription for no ads and can use that money for saving. Or you don’t need to spend money on snacks and use it for insurance. It’s not easy to separate your wants, but it’ll help you live a healthy and secure lifestyle.
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