why financial education is necessary?

WHY financial education is necessary?

We all live in this fast changing world(21th century) and movement of money is too fast and many times you miss the opportunity to catch it but numerous times we say that this was not my chance or I can’t do that. These are the only excuses and here comes need of financial knowledge and why it is important and what it is? I cover these topics. LET’S START.

What is financial knowledge?

Financial literacy or knowledge is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. There are many programs in which steps are taught to increase financial knowledge by experts. Countries like USA, Australia and other countries open free programs for people to teach this.

Why financial knowledge is important?

After the end of industrial era in 1981 and when US take off their currency value from gold and US have the right to print money in any amount they want. These reason increases the value of things because more money chase the same thing. Hence, this creates inflation and decreases the value of money. Many companies also stop giving pension to their workers and introduction of fake money is the most biggest reason behind inflation. Hence, these are some important reasons why we need financial knowledge?

Benefits of financial knowledge

 1. difference between need and want

It gives you the difference between need and want like buying an expensive phone is our want when it is not needed. And these wants sometimes bring financial crisis in our homes like taking money from any sources to drink alcohol, buy expensive clothes and electronics every month. These are the only wastes nothing else. Buy things when needed not when you want.

2. Making a budget

It teaches you how to make a monthly or any periodic budget because this controls your expenses and teaches you to how to manage money and do maximum from minimum money. Budget making skill can also help you in the field of business because cash flow is the oxygen of any business without money business cannot run.

3. Investment skills

If you want to invest in any field or an investor who didn’t earn too much money then need of financial knowledge is must become your priority and you want to develop through read financial magazines, financial seminar, read investing and business books and some other steps. It teaches you how to take risks and earn money through it. It also guides you on the path on which great investors walk like warren buffet, bill gates and Rakesh Jhunjhunwala etc.

bet financial book for beginners

4. It free you from others financial support

If you are a kid then you depend on parents for your financial needs but if you know how to make money without money from blogs, YouTube or any sources you like or know. It gives the power to earn and maintain money. In childhood, you must make too much mistakes and learn from trails and errors but this give you strength and gives you ability to take right decision in business or in financial situation.

5. give you money in old age

in earlier years, pension are the sources of money in old age but this trends go and many banks and companies give you guarantee to multiply your money through investment like famous 401(k) plan. But these create confusion and people never try to understand can they invest without any agents? And due to lack of understanding, financial agents takes big profit from your money without knowing you and left small amount of money for you and this makes the old age worse.

These are some reasons why we must learn financial knowledge and in my previous blogs I mention how to simplify your life by financial knowledge and things you need toknow before getting out of school.

THANK YOU