Why is Financial Literacy Important?

Now you may think what is financial literacy? Let’s understand the term first. Financial literacy is the one’s ability to manage the financial resources and expenses using his knowledge and skills.  It is basically the knowledge of making money and then taking wise decisions regarding spending it. Financial literacy is just like raising an awareness in your children about practical life and how everything goes when you are earning money by yourself. And it educates them about the need of earning and then spending it in a balanced manner to be successful in your life. it starts from saving pennies in your money box and goes on forever.

The need for financial literacy is emphasized as it is not taught in the schools or in the whole education career. It is a lifelong experience that continues to you throughout your life. So, when the children are taught at an early age they become more responsible, self-regulated and improves their power of decision. But most of the kids lack necessary guideline about financial literacy which makes them an irresponsible and a mismanaged person in their life. But the life teaches them in one way or another, so why not educating them at an early age to prevent them from any harsh experiences of life.

Saving money and then managing your expenses according to your budget and then instilling such habits in your children make them aware of your financial situations and how to handle it. You should even discuss your job, income, expenses and everything about your financial situations and how to tackle any crisis will incline them towards saving money and becoming a responsible adult. It will keep them from problems like debt, saving money, managing personal finance, growing interest etc. You need to teach your children, or students about economic principles to raise them as a disciplined citizen.