The Financial Education Class

The Financial Education Class 3

The Financial Education Class

Money, finances… a topic not too many people are comfortable talking about and most wishing to largely avoid. Most people do not know about money apart from how you can buy things with it.

Now the problem that arises, especially at present times, is that people associate their self-worth with how much money they make or they have. The reason that people choose not to probe each other on this topic is sometimes because if they feel like there are others who make more money, they are unwilling to talk about it. However, once you realise that the only way to improve your financial situation is to talk about it, and everyone else starts talking to, that is the only way we can break the taboo and make better financial decisions.

A brief lesson on The Financial Education Class, therefore, starts here.

Finance is the art and science of managing money while financial literacy refers to the knowledge and skills necessary to handle financial challenges and decisions in everyday life. (Sohn, Joo, Grable, Lee & Kim, 2012).

Demographic characteristics have been focused on as determinants of financial literacy. These include; education level, income level, gender etc. Family has also been viewed as the primary source of financial socialization. It has been found that involving children in family financial matters, as well as discussions on finance can help them build their financial literacy.

Mass media is also a vital socialization agent for both adolescents and adults. Obtaining financial information from media, like the Internet and newspapers, is indicative of an active effort (Sohn et al., 2012).

However, although media and family/peers have their role as financial information sources, consumers should be careful when using these sources and should not overly rely on them. Conversely, consumers should at least use the Internet when managing their finances due to its powerful and irreplaceable evolutionary features.

Managing finances is an important skill to acquire. However, lack of preparation causes our society to be subject to a high percentage of people who lack financial success. Financial management is managing the finances through scientific decision-making. Financial management is concerned with the acquisition (investment), financing (arranging funds), and management of assets with some overall goal in mind.

Many people, however, do not have control over their own expenditures, they are unaware of financial risks and are hardly able to oversee the financial consequences of events such as unemployment, divorce, illness or accidents.

A financial education class is important to attend to avoid certain money problems that could have been avoided, or even better, learn how to grow what you have already accumulated by saving and investing in it.

The reason why attending a financial education class or reading on similar topics is important is that;

  1. It helps you gain control. Learning what you can realistically afford and what you might need to trim from your budget can get you out of overwhelming situations.
  2. It helps you understand your money. An advisor can have a close look at your income and expenses and help you see if you have room to make a large purchase or how making such a purchase will affect the rest of your financial life.
  3. Financial education helps you plan for the future. You need to understand what different saving options are and how they may impact your goals. It can help you understand how to save based on your current income, inflation, and how long you anticipate living in retirement.
  4. Financial education helps you understand your choices. Having an understanding of how finances work can make you know the reason behind some choices you might need to make.