Financial literacy courses are incredibly important for millennials because many millennials aren’t educated enough to be able to successfully handle their finances on their own. While some people are skeptical about having mandatory financial literacy courses in college, they can be very helpful.
What is financial literacy?
Financial literacy is the ability to understand how money works; how someone earns money, manages money, and invests money. It’s important to have an understanding of this because it helps people save up money for times such as retirement, as well as avoid debt. And that is what the courses are all about.
A study from financial services company TIAA-CREF found that those with low financial literacy borrow more, have less money and end up paying unnecessary fees for financial products. Knowledge of personal finance has become a necessity, making financial literacy courses important to help people to thrive in the current financial environment.
But while the course can help, it isn’t an easy concept to grasp.
Grasping the concepts
The purpose of financial literacy courses is to teach the principles of decision-making so that people can understand how financial instruments work. After they are taught how these financial instruments work, the help of financial advisers can become more beneficial because the topic isn’t like a foreign language anymore. This gives people the opportunity to make better financial decisions.
Most of these courses focus mainly on budgeting and reducing debt, as these are the main issues that students face on a regular basis.
Budgeting and reducing debt
Many people who enter college already have at least one credit card and can be naive when it comes to how much time they think it will take to pay off their debt. Financial literacy courses are designed to educate people on the realities of debt, how to manage their money, and also how to reduce debt so they can be prepared to handle their finances in the future.
Taking a course to learn about how to manage your finances is important, and not learning could mean facing more trouble than you’d expect.
Dismissing it will cost you
Not being educated on financial literacy can be costly, as it causes many people to deal with charges and costs they could have avoided, had they been educated on the topic. It is common for young people to struggle with finances, but the earlier people learn about how to manage their finances, the less likely they are to struggle with debt in the future.
Having financial literacy courses available to people enables them to become more proactive with their finances rather than playing a guessing game and hoping for the best.
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