Why is personal finance important? That is a common question that goes through the minds of individuals, especially recent graduates who have not experienced firsthand the consequences of financial illiteracy. To answer the question, “Why is personal finance important”, many educators and policy makers are able to cite academic studies along with reports produced by financial education foundations. These documents show that personal finance training leads to an increased knowledge of financial products, more effective budgeting, and more dollars being sent into retirement accounts to build a financially secure future. Sadly, the latest personal finance test data shows that most lack the basic money skills needed in the real world.
An additional year of schooling increases the probability of having an investment income by 4.4% for whites and 1.7% for blacks (Harvard Business School). http://www.people.hbs.edu/scole/webfiles/cole-shastry-smarts%20HBS%20working%20paper.pdf
A statistically significant association was determined between negative financial habits, such as gambling among Australian youth, and the influence of peers and parents (Science Direct). https://www.sciencedirect.com/science/article/pii/S0140197103000137?via%3Dihub
“Without financial literacy, divorce rates soar, families rupture, and women stay with abusive men for financial security. A lack of jobs contributes to riots and illegal activity. Name any situation and it goes back to money. We need to focus on poverty eradication.” – John Hope Bryant, CEO of Operation HOPE
“Academic qualifications are important and so is financial education. They’re both important and schools are forgetting one of them.” – Robert Kiyosaki, founder of the Rich Dad Company
“Financial literacy is an issue that should command our attention because many Americans are not adequately organizing finances for their education, healthcare and retirement.” – Ron Lewis, former United States Representative
In order to increase the financial well-being of individuals within our communities, financial literacy is a necessity. It is the belief of the NFEC that personal finance should be required in high schools and elementary to help mold positive financial behaviors and help students work toward self-sufficiency. Those pleasantly surprised at the myriad of benefits that arise from being financially literate must also keep in mind that such knowledge is much easier to acquire through a reputable education program than other means. While good in intention, curriculum made by individuals without significant financial expertise will often glance over important detail and leave learners without much valuable knowledge.
The State Bank of Pakistan states that to help develop and disseminate content, it is important to partner with local and international entities and leverage their specialties (St. Benedict’s Preparatory School). http://www.sbp.org.pk
The Financial Consumer Agency of Canada (FCAC) confirms sharing best practices, lessons from failures, and other helpful advice will promote cooperation between financial literacy programs and enable the adequate coverage of the deluge of financial literacy skills (Government of Canada). https://www.canada.ca