Chat with us, powered by LiveChat

Financial Literacy for Students is Essential

Image with title financial literacy and bar graph and line graph drawings Financial literacy for students (and for everyone) is such an important life skill that there is a strong argument to be made for it being, if not a mandatory high school course, at the very least, a mandatory university one. A 2018 study from the University of Illinois found that nearly one third of young people were ‘financially precarious’ because they lacked money management skills and had poor financial literacy (on top of other reasons). Finishing a four-year program with a depressing amount of student debt is disheartening enough, even when you do know how to manage it.

Financial literacy is not something that human beings are born with, but it is certainly a huge advantage for the people who have it. The best part about acquiring financial literacy skills is that anyone can learn them. You don’t need to be mathematically gifted to learn how to manage your money, or learn how to read and interpret a financial statement, or how to file your own taxes. Below are some of the reasons why financial literacy for students is so important.

Employees, Consumers, and individuals are shouldering more financial burden

Perhaps the most important reason for improving your financial literacy as a student before you make your way out into the real world is that more financial literacy is not only expected of you, the expectation is forced upon you. Things like retirement planning, which used to be a given if you were working for a large corporation, are now luxuries for many people. There is an ‘everyone for themselves’ mentality to looking after society’s elderly and, short of a kinder, more humane social welfare system, it is, to an extent, “up to you.”

Pensions, once taken for granted, have become rarities instead of the norm. It is becoming increasingly common for employers to give employees the opportunity to participate in something like a 401K, or in Canada, a RRSP. Employees are allowed to determine how much of their income to contribute (with employers often matching those contributions), as well as decide how that money is invested. Knowing how and where to direct your money means understanding how to read and interpret financial trends, which could be as simple as understanding the business section of your newspaper.

There is less government aid than there was a generation before

Another good reason to insist upon financial literacy for students is that social security has been chipped away at over the last several decades. Social security used to be enough money for retired people to live, while certainly not luxuriously by any stretch of the imagination, comfortably enough to finish out their retirement years in peace and with dignity. Social security, and in Canada, the Canada Pension Plan, barely provides retirees enough money to survive on. Horror stories about elderly people living alone and in misery, having to return to menial work after the age of 65 in order to provide for themselves are common. A CIBC poll from 2018 found that some 32 percent of Canadians between the age of 45 and 64 have nothing saved for retirement.

If the government is unable, and/or unwilling to help provide its citizens with a comfortable retirement, it unfortunately falls upon the individual to provide for his or herself. Saving enough money to retire and live out the remainder of your life comfortably might seem silly, given that you are a young undergraduate student, but acquiring the skills to undertake sound financial planning and budgeting throughout your life is something you should do as early as possible.

Avoid and manage your debt

Avoiding and managing debt is something that every single person should know how to do. Too
often people are unable to evaluate their ability to service debt, or how much debt they should take on to finance their lives and the things they want to do. Financial literacy for students makes even more sense in this light because of how many students’ lives are currently, and will continue to be impacted by debt.

If you are trying to develop a budget for your life, or are taking finance courses and would like some help understanding and completing your assignments, there are professional academic writers able to help complete them for you. They are able to not only help you study for and complete assignments, but also offer financial literacy tutoring services to help impart the skills you need to manage your finances.

Understanding financial statements is essential for moving up

Money makes the world go round and, more importantly, it sets limitations on what an organization (big or small) can and cannot do. If your ambitions include moving up the ranks in whatever field you end up going into, being able to understand how and why your organization makes and loses money is essential. Even if you study something where you think you are going to be completely isolated from numbers and money, the more responsibility you have, the more you are forced to come to terms with money as the lifeblood of what you do.

Even if you work for a non-profit, understanding the organization’s income statement (to know where the sources of income and costs are coming from), and balance sheet (what assets and liabilities does the organization have?) is an essential part of managing anything.

Financial literacy doesn’t mean you have to spend years studying formulas, or trying to complete your Chartered Financial Analyst certification. You don’t need to be an economist to understand how to manage your income and expenses. What you do need, however, is access to some of the basic training that is out there, but you have to be exposed to it in order to get anything out of it. If you are wondering why financial literacy for students is important, keep the above considerations in mind, and for all of your custom academic essay writing needs, get in touch with Homework Help Global.

References:

(2018). “Many young adults lack financial literacy, economic stability, study finds.” Science Daily. Retrieved from: https://www.sciencedaily.com/releases/2018/08/180824135007.htm

Lovett-Reid, P. (2018). “32% of Canadians are nearing retirement without any savings: poll.” Bloomberg. Retrieved from: https://www.bnnbloomberg.ca/32-of-canadians-are-nearing-retirement-without-any-savings-poll-1.991680

Share:

Leave a Reply

Your email address will not be published. Required fields are marked *