The Covid-19 pandemic has not only put millions of lives in jeopardy throughout the world, but it has also thrown countless individuals into financial ruin. Financial education and literacy is fundamental life skill that has a direct influence on one’s personal happiness. Money management, savings, investment, and debt management are all fundamentals that should be instilled in children at an early age. Consider the advantage you will have in life if you are already in the habit of budgeting, saving frequently, and spending carefully.
People who understand how money works might begin earning and investing at a young age, avoiding lifetime financial difficulties.
You may not be taught how to make financially smart decisions in school. It is, nevertheless, an important element of everyone’s life. Here are four reasons why we need to start imparting financial education to kids at a young age.
Establishing a budget:
The first step in getting financial education is by understanding how to create a budget and manage money according to it. It is vital to keep a close eye on how much you make and how it is spent.
There are a plethora of software solutions that can make this work a breeze.
Have an emergency fund:
A financially savvy individual recognizes the value of having an emergency reserve.
More than ever, the current situation has made us understand that we must have three to four months’ worth of expenses set away as savings at all times. It’s a certain strategy to stay out of debt and makes it even more important for parents to get financial education for kids to help them be prepared for whatever may come.
Recognize and manage debt:
Understanding cash flow, taxes, and how debt works may help you better organize your money. Understanding the distinction between good and bad debts, as well as the difference between appreciating and depreciating assets, will assist you in increasing your wealth.
Housing loan debt, for example, might help you save money on taxes, develop an asset that increases over time, and perhaps generate cash flow in the form of rent.
A car loan, on the other hand, would deplete your finances over time due to monthly insurances, ongoing gasoline bills, and decaying value.
Make a retirement strategy:
In a developing country like India, the younger generation does not have access to social security. To be able to live comfortably after retirement, you must begin saving and investing as soon as you begin working. One must work hard to achieve financial independence.
Before one enters adulthood, learning how to manage money helps in making the individual a responsible adult. You may study at your own speed, take the time to learn how to manage your money better, not just to save but also to grow your wealth.
On financial education, there are several books, videos on the internet, online groups, and blogs. To acquire core knowledge, delve deep into them.
Financial education for kids holds the utmost importance as it helps in preparing the kids before they venture out into the world on their own. It’s important to remember that financial literacy is a need, not a luxury. It’s the key to gaining your life’s independence.