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Importance of personal financial education for students.
Most of the youngsters are struggling to meet their monthly expenses even after they are getting a decent salary from their career. The only reason for it is the lack of financial learning in the early ages. The reason behind it is most of the parents are worried to discuss the income and expenses with their kids and unable to handhold them in handling personal finance. In this blog, I would like to share the following.
- Advantages of financial education for students.
- What should need to educate in the financial domain?
- What parents need to do to become their kids financially literate.
Advantages of financial literacy for students.
Personal financial literacy is knowing the basic principles of financial management and applying them in our day-to-day life. The advantages of financial education in the early ages are countless, however, below listed are a few of them.
- Financial education helps youngsters to become independent and self-sufficient in handling finance.
- Financial literacy empowers youngsters with basic knowledge in cash inflow and outflow management.
- Financial education helps to understand financial institutions, capital budgeting, investment options, etc…
- Financial literacy helps youngsters to foresee the risks involved in financial decisions.
- Financial education help to avoid many of the financial mistakes that lead to lifelong money struggles.
- Financial literacy help to distinguish the difference between wants and needs.
- Financial education helps to plan for retirement at an early age.
What should need to financially educate students?
It is important to know, what we should teach to our kids in the domain of finance, as it is a wide subject. Below are the few topics we can concentrate on and teach them, as it covers the fundamentals of financial literacy. These 10 important topics cover the basic needs of personal financial education for students.
- Personal income and expense tracking.
- How to manage cash inflow and outflow.
- Household budgeting and its techniques.
- Taxation system & tax slabs.
- Loans and debt and Interest rate for it.
- Elementary personal finance balance sheet.
- Investments & Banking systems.
- Asset management and basic accountancy.
- Basic knowledge about financial institutions and stock markets.
- Fundamentals of Financial Risk Management.
How to provide financial literacy to students?
Even if parents don’t have much insight into financial learning, it’s up to them to provide basic financially literate to their kids. As we are living in the digital age, we can get an abundant amount of information at our fingertips. Regularly collect it and frame it and transfer it to our kids for their future. Following are the few methods which we can try to get our self financially educated and transfer that knowledge to our kids.
- Financial online blogs.
- Financial videos on YouTube.
- Basic personal financial books.
- Interaction with financial experts and friends.
- Involving kids in household financial decisions.
- Allow kids to manage their finance and track it daily/weekly.
- Discuss with kids about family income and expenses.
- Make them aware of our financial mistakes.
Knowing how to save money can help students to achieve financial independence faster and develop healthier spending habits as adults. The goal of every parent should be to provide proper financial education to their kids which helps them to become stronger in basic financial concepts. Personal financial education is the wealthiest asset that we can provide to our kids.
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