The Need for Financial Literacy

What we do with our time and our money during our lifetimes is important. For those that die at 80 years old, there will be 29,200 days to spend time and money. While we are all uniquely gifted with talents, we are not all equally gifted with money. Rather, social and economic factors impact access to income and financial education. What’s more, attitudes toward money as well as the level of education attained drive financial decision making. In a 2023 Gallup poll, of the top five problems facing American families, too much debt ranked third and lack of money/low wages ranked fourth. Financial literacy is the basis of our relationship with money. Our ability to understand financial concepts and to use various financial skills can affect our behavior toward money and influence our financial decisions for the rest of our lives.

Start Early

Financial literacy begins in the home. Managing money is a life skill that children can practice to understand expenses and to recognize the importance of saving money and gifting money to others. The more a behavior is practiced, the more likely it is to become routine. Children emulate parental behavior about values around money, just like other habits and customs. Helping children develop a healthy relationship with money through communication and demonstration will help prepare them for financial challenges, such as creating a budget, establishing spending limits, and controlling buying impulses.

Personal Finance 101

Although teaching children about money starts at home, personal finance education in high school is another means of evaluating transition readiness for students entering the workforce or pursuing post-secondary education. A mere seven states required 2023 high school graduates to take a personal finance course. Young adults need money to accomplish life goals, including paying for college, buying a home, and saving for retirement. The lack of financial knowledge can lead to young adults taking on unnecessary debt, which can derail their pursuit of these life goals. Conversely, higher levels of financial literacy lend itself to a higher quality of life. Having control over personal finances can reduce stress and provide a sense of security.

Lifelong Journey

Achieving financial freedom means having enough money to live where you want and to take care of your needs. Sufficiency in savings, investments, and cash is not about being rich, but having enough to cover expenses so that you can enjoy living life. The path to financial freedom is a lifelong journey that requires effort and determination. Parental influence over money and access to personal finance education in high school shapes habits, but the absence of these experiences simply means financial knowledge will have to be sought elsewhere. People of all ages can benefit from financial education available through banks, advisors, podcasts, and community programs. The time invested in financial education and building the life you desire is within your reach. What are you waiting for?