Financial literacy is the ability to use various financial skills, such as budgeting and investing. Investopedia states that these skills can help individuals reach their goals by teaching the individuals about how to manage their money wisely. It is basically one of the most important skills in life. Because of the importance of this skill, I believe that schools should teach financial literacy to students. Firstly, because it helps you save money. Secondly, it can teach you how to invest, and finally, because it helps you to budget.
Firstly, financial literacy should be taught in schools because it teaches us on how to save our money. Saving money is an essential skill for life and must be taught to everyone. Saving money can bring various benefits. It is said by chnfc.co.uk that this skill can help you in emergencies. Emergencies can happen any time and are usually unexpected. For example, if you suddenly got injured or got diagnosed with a disease, you will need money to pay for the hospital bills. If you do not have enough money in that situation, you will just have to ignore your injuries that can lead to many problems. Additionally, it is also stated on chnfc.co.uk that saving money can prepare you for a sudden job loss. Same as emergencies, job losses can be sudden and unexpected. If you lose a job and do not have any money saved up, it is most likely that you will go bankrupt. Bankruptcy can lead you to having a debt, which can also be stopped by saving money. If you are already in debt, saving up money can help you pay your debts. However, saving up money can also limit the amount of debt you need. chnfc.co.uk states that this will limit the requirement of further finds and would allow you to save the amount that would have been spent on interest.
Secondly, schools should teach financial literacy because it can help you invest. Financial literacy teaches you on how to make investment decisions, and how it will impact your tax liabilities in the future. This knowledge should be taught in schools because this is an effective way to put your money to work and potentially build health, too. This is a skill that must be learnt. Firstly, it can build your wealth. It is stated by royalbank.com that historically, long-term equity returns have been better than fixed incomes. Furthermore, it has been proven that stock-market fluctuations do tend to smooth out over long periods of time. Secondly, you can protect your wealth. Investments give you better tax treatment over the long term. This is important because taxes and inflation can affect wealth drastically. Inflation can encode the purchasing power of your income and health, tsgmm.com states. This also applies to taxes. Taxes can affect decisions on work, savings, and even their choice of resident Standford state. Other reasons on why investing is important include: it can maximize your wealth and have a higher income.
Finally, financial literacy should be learnt because of the importance of budgeting. The definition of budgeting is a plan you write down to decide how you will spend money each month. This is similar to spending and saving but more important because this will prevent you from overspending and help you to have a better spending habit. This skill should be taught to students because it is stated by insidehighered.com that 68% of undergraduates overspend, spending twice the amount that is suggested. Furthermore, it is also stated by onime.hbs.com that this skill can help determine which teams and initiates require more resources and areas. By doing this, you can also evaluate and review how much money you have spent and saved, which will help you know your spending habits, and what type of product you spend the most money on. This skill should be taught to the students, so in the future, they can manage their spending habits and make it so that they do not overspend. Not only can this skill help students to save money, but it can also get them what they want. Tiffany Aliche, personal finance expert and the founder of Budgetnista, gave an opinion on this. She said, "Whatever it is that you’re wanting, you can go to your budget and figure out how your budget can give you that thing."
In conclusion, financial literacy should be taught because of the skills that can be learnt from it, and the benefits those skills give you. Firstly, financial literacy could teach students how to save money. Saving money is important because it can help and teach you to prepare for emergencies and job losses. Secondly, it will teach students how to invest money. This could teach students how to protect their wealth while also teaching them how to increase it. Finally, this should be learnt by students because it teaches them how to budget. Budgeting will help them fix their spending habits and help them to get what they want. If students learnt this, they would be able to have better lives.