The importance of a financial education

19 Feb

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There are many things that we are taught in formal schooling. However, although we are taught how to add up (and many other less practical things like algebra) in maths lessons we are often not taught how to manage our money.  Unless you are a lucky lottery winner most people do not have a bottomless pit of money.  Most people have to manage their money.  Some people are better at this than others. Many people struggle with this essential task.

Being financially literate is important to everyone – young and old, rich and poor.  Parents can start teaching their children financial management from a very young age.  It can be as simple as explaining that pocket money can be saved to buy something you want and starting a savings account at the bank.   It can develop into something more complex such as understanding income and expenses, taxes, investments and so on.  Research has shown that adult financial habits are set by the age seven years old.  While financial education needs to begin when children are young but also must form part of their adult life.

Credit cards, overdrafts and short term pay day loans often obtained through websites like http://Wonga.co.za can help with getting you out of a tight spot when financial planning goes wrong or if an emergency pops up from nowhere.  However, understanding budgeting, financial planning and keeping within your means is key to avoiding debt.

Money does make the world go around.  How much money you have, or don’t have, affects our whole lives.  From the house you live in, the car you drive, the holidays you take and the food you eat.   People need to be given enough financial education to make the best decisions for themselves.    Governments, financial institutions, schools and employers can all assist with financial literacy.

In the UK the Bank Standard Commission has stressed the importance of financial education stating that “more informed consumers can … be empowered to challenge banks who try to mis-sell, contrary to their best interests.  More importantly, financially literate consumers are able to exercise informed choice and impose market discipline on banks”.  This has also been recognised in South Africa.

The UK appears to be quite astute when dealing with financial education.  It has numerous websites to assist with money management such as the Money Advice Service.  On top of that in the UK financial literacy education will soon become compulsory for children from the age of 15.    In South Africa the latest National Credit Regulator statistic is that 9.05 million active credit consumers have an impaired credit rating.      Some form of financial literacy program seems to be an obvious answer to reducing debt in South Africa and getting the country saving.

7 Responses to “The importance of a financial education”

  1. Billie August 11, 2013 at 7:11 am #

    I am trying to start up the Institute of Research and Development in Technical Education, Science and Technology. I am the founder of the Institution.
    The project is in Zambia in Africa. I notice that most grant financing institutions are available for the Developed Countries such as U.K, USA, Canada etc. Any possibility of grant financing institutions in these countries or indeed any other countries for African start up institutions?
    The project is in Zambia in Africa. I notice that most grant financing institutions are available for the Developed Countries such as U.K, USA, Canada etc. Any possibility of grant financing institutions in these countries or indeed any other countries for African start up institutions?

  2. Tennille August 14, 2013 at 4:04 pm #

    How is the importance of a job measured? For example, why do professional athletes, musical artists, and actors make more money than the president of an entire country?

  3. Kareen August 23, 2013 at 10:01 am #

    I am a student at San Jose State University about to finish my third semester. I am a girl desperately crying out for help! PLEASE!

    Throughout my life I have struggled in school because of numerous personal issues in my family, social, financial & love life. Hoping to escape these issues I decided to attend San Jose State University as a pre-nursing major. Ignorant & naïve to think that my hardships would simply disappear, they followed me into my college academic career. I let my personal issues & life overcome the importance of my education, causing my grades to suffer. For any career in medicine competition to get accepted into a school to earn a bachelor’s degree is insanely difficult! I already know that my grades are NOT EVEN CLOSE to being acceptable & want to start over academically. I was a 4.0 student in high school & believe that I can be a 4.0 student again. I just need one more chance to redeem myself.

    My ultimate goal is to become a nurse practitioner & eventually become a health administrator. For both career options I will need a master’s degree. In order to achieve this dream I will need to take things day by day & start from the very beginning.

    What are my options? Can I go to a junior/community college, raise my GPA & eventually transfer into a private school?

    I beat myself up every day for not taking advantage of my college education from the start & instead running it in to the ground. I am in need of desperate help, encouragement & support. Please.

  4. Lupe August 25, 2013 at 3:07 pm #

    I have a basis understanding of the stock market, and am ready to read books, etc to help form a strong study of the market.

    Any recommendations for specific books or tools?

  5. Youlanda September 3, 2013 at 9:01 pm #

    I’m 19 and I’ve been interested in buying stock since I learned about it in high school. I would like to know what website would be best for me to use and I prefer there to be a small minimum deposit.

  6. Taneka September 6, 2013 at 8:08 pm #

    Very confused on this subject. I want to get financial aid using my income and not my parent’s. I don’t live with my parents and I have a baby.

  7. Alejandra September 11, 2013 at 9:43 am #

    I’ve been getting a lot of money lately and I want to start investing and buying stock. I’m only 13. Is that old enough to start buying stock? I’ve just wanted to learn and practice so I can prepare for the future.

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