Money Management Information
Money management information is critical for a successful life. Without it, people don’t know how to make the right decisions about their personal finances, which are among the most important decisions they will make throughout their lives. If people are never taught these critical life skills through money management seminars or other training, they have no basis for making a prudent decision about their money and no way to consider the risks and rewards involved when planning for their future. If they never have access to money management information, they might never even consider planning for the future. Given the lack of money management education throughout society today, it is little wonder that so many people throughout the US live paycheck to paycheck. They simply were never shown an alternative.
Information is Critical When Managing Money
If you’re looking for money management information, the term itself involves handling an individual’s assets by budgeting, saving, and investing in assets. Individuals, some experienced but most lacking a strong financial education, seek money management information to assist them in handling their personal finances and building a nest egg for retirement. Saving for retirement requires making smart personal financial decisions, smart investment choices, and more – all of which mandate a solid understanding of financial literacy.
Sources of Information About Money Management
40.2% of those with low levels of financial literacy relied on parents, friends, and acquaintances as their most important source of financial knowledge, compared to 20.8% of those with the highest levels of financial literacy (National Bureau of Economic Research). http://www.nber.org/papers/w13565.pdf
A mere 31% of young Americans thought that their high school education adequately taught them good financial habits (Bank of America). https://bankofamerica.com
The World Bank cites numerous studies that demonstrate that the positive benefits of financial education spillover to the peers of participants of the program. Groups exhibiting less financial literacy, including women, certain ethnic groups, and rural areas should be the target of programs (World Bank).
http://documents.worldbank.org
Financial Illiteracy Leads to Poor Money Management
Borrowers who scored lowest on a test of financial literacy were in mortgage delinquency 25% of the time, compared to the 12% mortgage delinquency for those who scored highest on the assessment (Federal Reserve Bank of Atlanta). https://www.frbatlanta.org
A 0.2 increase in standard deviation on a financial literacy score would result in a predicted additional $13,800 in new wealth (U.S. Dept. of Health and Human Services). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3554245/pdf/nihms-400812.pdf
7.7% of those scoring in the lowest quartile of a basic financial literacy test participated in the stock market, while participation among those in the top quartile was 32.8% (National Bureau of Economic Research). http://www.nber.org/papers/w13565.pdf
31% agree they have more debt than the average person (Money Confident Kids). http://www.moneyconfidentkids.com/content/dam/money-confident-kids/PDFs/PKM-Surveys/2017_PKM_Results.pdf
6% of Americans between ages 18-26 are not optimistic about their financial future (Bank of America). https://about.bankofamerica.com
Money Management Training has a Positive Impact
One team of researchers decided to analyze the efficacy of simulations in producing behavioral change in students. Students who took Junior Achievement’s Finance park, a simulation for middle school students that sees students assume family and income scenarios, were split up into two groups after going through the park the first time. One group underwent financial education training while the other group did not. After 12 weeks, all the students went through the park for a second time. Over half the students in the group that received training were able to successfully construct a budget, a statistically significant amount over the only 1 student who was able to do so before the training (National Bureau of Economic Research).
http://www.nber.org/papers/w16271.pdf
Students who underwent the Moneytalks educational curriculum demonstrated positive behavioral changes. A ‘saving scale’ constructed by the author was the composite of a series of questions asking students about their savings habits. The mean value of the savings scale rose from a mean of 24.28 to 26.78, which was deemed statistically significant. Furthermore, statistically significant differences were noted for the proportion of kids who would compare price and buy on sale (University of California Dept. of Agriculture and Natural Resources).http://ucanr.edu/
After reviewing numerous models for financial literacy, and information gathering from over 90 organizations, the Citi foundation outlined common themes among effective financial education models. The Citi foundation recommends the development and piloting of new models of financial education based off what has been learned about what works best (Citigroup).
https://www.citigroup.com
Information on Money Management is Critical for a Successful Life
Access to money management information is a requirement for leading a successful financial life. In order to make the right investment choices to grow assets and save for retirement, a solid background in money management information is required. Unfortunately, the money management quotes demonstrates that many individuals are ill equipped to handle the financial obstacles that they will inevitably encounter in their lives. Without these much-needed skills, it is easy for individuals to falter and make financial decisions that will significantly set back their plans for retirement.