Learn Financial Literacy

Financial literacy and good money management habits are essential today, with so many investment and financial products, new consumer products and services, and temptation awaiting at every corner. Financial literacy is particularly important for young Canadians and helps avoid major money problems such as credit card debt, bad credit (https://www.creditandloans.ca/bad-credit-car-loans/), excessive debt, foreclosure, repossessions, and bankruptcy.

Benefits to Financial Literacy

There are many benefits to developing good financial habits, one being that knowledge of basic concepts helps avoid costly mistakes. In fact, good financial discipline, proper planning, and budgeting help achieve short- and long-term financial goals without stretching too far and incurring excessive debt. Retirement planning is also important and the sooner you start, the better. The problem is that retirement planning requires knowledge of financial concepts that help make projections and predictions about future variables. These include pension benefits, inflation, and income growth as well as concepts such as present discounted values.

Debt literacy is also important and is associated with different financial experiences such as using a checking account, investing in mutual funds and stocks, using pawn shops, borrowing from payday lenders, and making purchases on a credit card: https://www.creditandloans.ca/secured-credit-cards-for-canadians/. Financial decisions, whether saving or taking out loans, are interrelated, which makes debt literacy essential. For instance, consumers who use savings accounts and retirement planning instruments are more likely to stay away from debt. By the same token, customers who always pay the balance in full are less likely to use payday and other high-interest loans (https://www.creditandloans.ca/) compared to those who pay the minimum only. This means that financial and debt literacy (and illiteracy) can have an effect on different aspects of your financial future. They are associated with participation in the stock market, investing, wealth accumulation, and retirement planning, and the results depend on your money management skills. A rich set of financial experiences and good knowledge of basic concepts contributes to wise money management and planning.

What Can Be Done

Workshops and programs that involve money-related activities can be of help. In fact, reports show that students who participate in such programs show better budgeting and money management skills and adapt healthy budgeting and financial behaviors when facing different financial scenarios. Workshops also help to this end and enable students to develop a better understanding of financial and investment solutions and money management skills. This is particularly important in difficult economic times (http://www.apa.org/helpcenter/resilience-tough-economy.aspx). Financial literacy and budgeting lessons benefit students in many ways and teach them how to save and spend wisely. This is particularly important for young people as many have little financial knowledge and exposure to credit. High school students can be thought more complex subjects and issues such as the pros and cons of borrowing, high- and low-risk investment solutions, effective and proper budgeting, the fine print on loan and credit card applications, the consequences and causes of foreclosure and bankruptcy, and so on. Programs can be offered as part of the high school curriculum or in the form of professional development programs. Basically, the goal is to teach students how to stay out of financial trouble, plan ahead, and improve their financial situation. Different tools can be used to this end, including financial goal and financial priorities worksheets, debt load and net worth worksheets, webinars, expense worksheets and records of daily expenditures, and many others. Expense worksheets, for example, are handy in helping students to develop and stick to a spending plan while financial goal sheets divide goals into categories - long-term and short-term, trackable, rewarding, achievable, measurable, and specific.

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