From a very young age children learn everything about math, biology, chemistry, literature, and so many other subjects. Of course, all these classes are important for their education, literacy level, and future perspectives in life. However, there is one thing that most children or even young adults know nothing about. It is financial literacy. Such knowledge helps us make good financial decisions, plan expenses, and build a solid financial future. So how important is financial competence to students?
Well, first, we’ve learned young people are rarely well-educated in all above-mentioned issues, even when they go to college. Of course, it is a big mistake that can affect students’ quality of life, credit score, and financial stability for years to come. Needless to say financial competence to students is important, so, let’s have a quick breakdown of why financial competence and education are important for students and how to achieve it.
How Important Financial Competence Is To Students
Achieving money goals
Many young people dream of traveling. Others dream of expensive clothes or need high-quality gadgets for work. All those goals require money. However, achieving financial goals is not as easy as it may seem. One needs to exercise a lot of self-discipline and financial awareness to fulfill their dreams. Students should realize that their relationships with money affect how they interact with the world, including their lifestyle and possibilities of meeting their dreams and goals.
Irresponsible financial behavior will affect how long it takes to complete each of your goals. However, completing such goals always means great life experiences, an improved lifestyle, and even personality growth.
Learning between wants and needs
Many young people are yet to learn about the difference in their wants and needs. So, ‘wants’ is something you desire but don’t necessarily need, like a new pair of shoes, another smartphone model, accessories, etc. ‘Needs,’ on the other hand, maybe not be where you want to spend your money, yet, you absolutely should. This category includes bills, healthy food, textbooks, etc.
Of course, spending money on what you want may be more fun and enjoyable. However, such money spending won’t bring you far, especially since your needs aren’t going anywhere. In fact, it is a common mistake many young people make during their first year(s) in college. It’s often the first time they gain financial freedom and complete independence in decision-making. So, they tend to spend all their money on wants like better clothes, games, coffee to go, etc. However, by the end of the month, they still need to face their needs, like rent and gas.
The ignorance about these two concepts leads students to believe they are always broke. However, there are high chances of them simply spending money not where they need to go. Still, time, mistakes, and budgeting teach people about directing their funds they need to go first.
Preparing for emergencies
Financial literacy is extremely helpful during times of emergencies. So, when something unplanned and bad happens, like a car breakdown, health issues, or missed deadlines, a student has a financial safety net to deal with it. Thus, students who recall their deadlines a few hours before the due time can afford to order a paper online. Just don’t forget about www.writingpapersucks.com – real customer reviews to know what you are buying.
Also, being good with money means being responsible with how you approach things. Yet, people who lack financial awareness often get into the most trouble for financial reasons. Hence, achieving financial competence to students will mean fewer situations where emergencies can occur in the first place.
Decision-making skills
Everything involving money requires a good portion of decision-making skills. You need to understand how much to spend on what, where to prioritize, and why. Such skills are helpful in monetary issues and can advance your standing in life in general. Being a decision-maker means taking responsibility, using critical skills, and acknowledging the consequences and causes of such actions. Many young people can greatly benefit from learning skills like that.
Of course, one needs to be well-educated on the issue to make good financial decisions. Hence, students need to do at least some research, make the pros and cons lists, read the financial news, educate themselves on the best deals, etc. Such a process also encourages young people to invest more attention in the financial world.
Achieving financial stability
Students who can make sound financial decisions can ensure a more stable financial future for themselves. It is something we all want or should want for ourselves. Financial stability means independence, confidence in the future, and the ability to pursue personal dreams and desires without being held back by money issues.
Of course, students will have to go a long way to achieve such a result. However, it is more than possible with the right approach and a little help. Just think how nice it would be to read what John Milovich wrote in his review and be able to afford the kind of help he is describing without calling it an emergency. This is a valuable tip considering financial competence is important to students.
How to improve financial literacy
The importance of financial literacy is self-evident at this point. So, let’s see a few lessons that can help you achieve higher financial competence during college.
Budget
You need to know where your money goes, how much you earn, what your main sources of income are, etc. A budget is a perfect solution to keep everything organized and predictable. Hence, you must learn to track all your incomings and expenses.
Spend wisely
Learning how and where to spend money is a rare but valuable skill. A budget will show you where to cut expenses or change some financial habits. See how you can save more by spending less. This is a valuable tip considering financial competence is important to students.
Save
Lastly, saving is the only way to always be ready for financial troubles. You should make a habit of saving at least 10% of your monthly income. Such savings should not be touched unless it is an actual emergency.
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