10 Reasons Why Learning About PERSONAL FINANCE is Important3/11/2021 13 Comments DoughMain Financial Literacy Foundation is dedicated to helping young adults acquire the skills and understandings necessary to build for a lifetime of financial responsibility and a secure financial future. Understanding personal finances is not easy, nor can it be one of the most engaging areas of study, but having the ability to understand and plan for the future financially can have an incredible impact on a young person’s life. Though the US has focused on financial literacy education, and to date 45states have adopted standards for Financial Literacy Education, only 24 states require that a personal finance course be offered.We are becoming less financially literate. Based upon our experiences, we believe the following are compelling reasons as to why it is important for schools to teach about personal finance. 1) The lack of “friction” related to the way we purchase and spend. Technology has made it increasingly easy to purchase items and spend money. Without handling it, we seldom think about the consequences related to purchases. In-fact most households overspend their income monthly, creating situations where individuals and families are continually trying to catch up. 2) Student loan debt increasing. Student loan debt has soared from $260 billion in 2004 to over 1.7trillion last year. The average student takes on more than $35,397 in student loans and maintains student debt well into their 60s. Students who understand the decisions that they are making are more likely to avoid costly debt. 3) Understanding personal finances encourages good savings, investing and financial practices. From youth to adulthood the ability to learn, understand and practice sound financial decision-making skills encourages youth to ask questions, make better decisions and carry those practices on later in life. They are also more apt to share their financial decision-making processes and discuss personal finances with their children. 4) Young adults are filing for bankruptcy. Students start spending sooner, have more debt options, have more debt in general, student loans are costlier, and people are going bankrupt younger. In 2020 more than 1,253,444 million Americans declared bankruptcy according to the American Bankruptcy Institute. This is the fastest growing demographic in bankruptcy cases. 5) Common misunderstandings can lead to serious financial issues later in life. There are many myths when it comes to managing your personal finances. It’s important not to listen to outdated advice or blindly follow rules of thumb. In fact, many experts suggest that the commonly held rule of holding 6 months of income in emergency reserve is incorrect and now encourage holding 9 months in reserve. 6) Understanding of basic skills in personal finance helps to ensure individuals do not become victims. Often during times of financial stress individuals are faced with having to make decisions financially that they lack confidence in, or because they are pressured by creditors. Understanding basic skills helps to avoid these situations and challenges and helps individuals overcome financial inequity. 7) Give yourself options.Understanding personal finances can help to plan and provide for options when faced with making financial decisions, especially during time of financial stress. 8) Planning for today and tomorrow. Understanding basic skills and practices in personal finance helps you to plan for the future and provides you with an understanding of how the financial decisions that you are making today affects you tomorrow. 9) Stabilizing parents and families.Understanding personal finance is an integral part of managing a household, planning for families, and securing futures. Most Americans would not give themselves better than a C in their own personal financial understandings. As husbands, wives and parents it is important to plan responsibly for the day to day, for family growth and for retirement. 10) Financially literate youth become good members of their communities. Financial literacy lays the foundation for the future. Understanding skills in personal finance helps individuals to recognize their dreams, to establish businesses and organizations and to help themselves, their families and others succeed. 13 Comments 6/23/2022 04:34:08 am Hello dmfinancialliteracy, I read your blog and Found it interesting and got a great knowledge about Ticket Booking Companies and their Travel system and i also have had a great interaction with one of the similar kinds of <a href="https://paydeer.in/services/ticket-booking">Ticket Booking Companies In Rajasthan</a> and how they have been a satisfied ticket booking website for people across India as They have also entertained me with their best facilities and discounts on my first booking and hence had a great user experience out there, I would definitely like to suggest you to check it out if you want to enjoy and grab many kinds of offers and discounts on your first ticket booking. 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Understanding how to manage money and make sound financial decisions is essential for long-term success and stability. The 10 reasons listed here accurately highlight the importance of personal finance education, and it's never too late to start learning and improving our financial literacy. I hope more individuals recognize the significance of personal finance and make it a priority in their lives. Reply Divya link 2/9/2023 10:35:59 am Hi, I read your blog as it talks about importance of public finance in today's world. Thanks for sharing your values and knowledge with other people Reply 5/18/2023 08:35:26 pm Brokers guide you throughout the qualification and loan approval process. If you don’t have the luxury of time to research mortgage options, working with a mortgage broker will help simplify the entire process. Reply geeta 6/30/2023 02:38:13 pm Hello, your article is very good and easy to understand about financials and to know more about simple and free budgeting rules click on the below link. Reply Wow, what an insightful blog post! I couldn't agree more with the importance of learning about personal finance. It's incredible how often we neglect this crucial aspect of our lives. Your article brilliantly highlights ten reasons why we should all prioritize understanding personal finance. From managing our budget effectively to securing our financial future, each point resonates strongly. The way you explain complex concepts with such clarity is truly commendable. Thanks to your guidance, I feel empowered to take control of my financial journey. This article serves as a wake-up call for everyone to invest time and effort in learning about personal finance. Kudos to you for spreading this invaluable knowledge in such a friendly and approachable manner! 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10 Reasons Why Learning About PERSONAL FINANCE is Important? ›
Understanding personal finance is key to managing money wisely and building a secure future. At its core, personal finance is about knowing how to handle your income, expenses, savings, and investments.
Why is learning about personal finance important? ›Understanding personal finance is key to managing money wisely and building a secure future. At its core, personal finance is about knowing how to handle your income, expenses, savings, and investments.
What are the 5 basics of personal finance? ›There's plenty to learn about personal financial topics, but breaking them down can help simplify things. To start expanding your financial literacy, consider these five areas: budgeting, building and improving credit, saving, borrowing and repaying debt, and investing.
What best explains why students should learn about personal finance? ›Financial literacy equips students with essential life skills, enabling them to make well-informed financial decisions and effectively manage their money throughout their lives.
How can personal finance benefit me as a student? ›Students who are required to take personal finance courses starting from a young age are more likely to tap lower-cost loans and grants when it comes to paying for college and less likely to rely on private loans or high-interest credit cards, according to a study by Christiana Stoddard and Carly Urban for the National ...
Why are personal financial statements important? ›Keeping an updated personal financial statement allows an individual to track how their financial health improves or deteriorates over time. It can be a valuable tool when consumers want to change their financial situation or apply for credit such as a loan or a mortgage.
What is learned in personal finance? ›They'll learn to calculate net worth and net income, explore various occupations and the income for each, and how income taxes work. A chapter dedicated to managing money teaches about the benefits of savings and checking accounts as well as the various types of banking institutions.
What is the 10 rule in personal finance? ›The 10% rule, often mentioned in personal finance discussions, recommends putting (yep, you guessed it) 10% of your income toward savings and investments. It's a simple way to encourage financial responsibility and help you build a solid financial future.
What are 7 steps in personal finance? ›- Define your short- and long-term goals. ...
- Audit your current income, savings, and long-term savings and investing plan. ...
- Address shortfalls/adjust goals. ...
- Account for multiple future scenarios. ...
- Develop a comprehensive financial plan. ...
- Implement and monitor that plan.
#1 Don't Spend More Than You Make
When your bank balance is looking healthy after payday, it's easy to overspend and not be as careful. However, there are several issues at play that result in people relying on borrowing money, racking up debt and living way beyond their means.
Why is personal financial planning important? ›
Having a written financial plan gives you a measurable goal to work toward. Because you can track your progress, you can reduce doubt or uncertainty about your decisions and make adjustments to help overcome obstacles that could derail you.
Why should students study finance? ›Finance encompasses the management of money at the personal, corporate and public levels. Students learn the big picture of business and can prepare for careers ranging from financial adviser to investment banker.
What is the best way to learn about personal finance? ›Talk to professionals, such as financial advisors, bankers, accountants, and attorneys. They are often happy to share their general knowledge with those just starting out, especially if you show a keen interest in learning more.
Why is it important to study personal finance? ›A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business. Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending.
What is a goal in personal finance? ›Key takeaways: Financial goals can be short-, medium- or long-term. These goals can help you succeed in your personal and professional life and save for retirement. Examples of financial goals include creating an emergency savings account, building a retirement fund, paying off debt and finding a higher-paying job.
How does finance impact your personal life? ›Knowing what personal finance is can help you keep your money in check and handle everything that comes your way. It encompasses the most important aspects of your financial life, like saving and planning for future goals, more mundane activities like buying groceries and paying bills, and managing and reducing debt.
Why is it important for you to learn about basic personal financial planning? ›Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.
Why should students learn about personal finance quizlet? ›Which of the following best explains why students should learn about personal finance? Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future.
Why is personal finance important upon your behavior? ›Personal finance is dependent on your behavior because your everyday spending habits and actions determine your financial health. Personal finance is 20% knowledge and 80% behavior.
Why are finances important in personal development? ›It can help individuals plan for retirement, save for a home, and invest for the future. By understanding how to manage their finances effectively, individuals can increase their chances of achieving their financial goals and improving their overall financial well-being.