Financial literacy is an important skill for students to learn to help them manage their money. It can help students avoid accumulating debt and ruining their credit score. It can also help them plan for retirement and make wise investment choices. Nearly everyone will borrow money at some point in their life. Knowing how to understand interest rates, compound interest, the time value of money, payment periods, and loan structures is key to borrowing effectively. Having a basic understanding of these concepts will help students make better borrowing decisions and reduce their stress in the long term.
Financial literacy can help you to create a budget and set goals. It will help you to avoid debt and build a cushion to withstand financial crises. It can also help you to save for a new car. Financial literacy concepts can be taught to children at an early age, which will help them form good financial habits for life. A study by Cambridge University showed that children start developing habits around money as early as seven years old.
Financial literacy helps individuals and businesses plan for the future by empowering them to make better money decisions. It also protects individuals from debt, fraudulent activities, and cyber risks. It complements consumer protection programs.
