Financial Literacy Part Two

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Financial Literacy Key To Economic Turnaround

Now while I agree that we aren’t likely to see a headline like this anytime soon, there is more than a pinch of truth in it. The staunchest supporters of any movement, or the leaders in any industry, tend to be the people who know the most about it. Finance  and economics are no exception. When financial literacy is actively promoted and taught, you soon have a whole cadre of individuals that not only have no fear around money, they understand it.

By teaching the youth of today as well as the immigrants that are coming to this country financial literacy, we are not only setting them up for a good result at the end of their working lives, we are also changing the fundamentals of how they use money as they go through life. Without the mystique and negative connotations about money filling their heads, they can see money for what it really is, just another tool to help you get what you want and need out of life for you and your family.

financial literacy

This kind of knowledge really can impact in two distinct, yet effective ways. On one hand, a good sound education that includes financial literacy will make it less likely that a person will abuse credit in the same way that a financially ignorant person might. In the past, creditors have been accused of extending credit to young adults when they didn’t have any financial education to speak of and taking advantage of their ignorance. The second point is that an educated person can utilize that knowledge to start up a small business and to help create the jobs and wealth that will pull our economy out of the tank.

Financial Literacy: Economic Catalyst?

By and large, a well informed and educated person is one that will be more confident and that confidence will extend to the business that they conduct.  Instead of the ‘just hanging on’ mindset that runs through so much of business world today, they will see opportunities in growth and in better service. They will operate from the viewpoint of possibility, rather than limitation.

When financial literacy is taught to all students right across the board, it has the wonderful advantage of being absorbed by two groups of individuals that can really utilize it. The individuals that will be involved in business of any kind, and those that will become top income earners as professionals will be armed with knowledge about money matters in a way that has never happened before. In the past, unless the individual had astute parents who taught them, the learning of financial literacy was largely up to them.

financial literacy1

This resulted in those interested in commerce having a much slower learning and development curve than is necessary or even ideal. Just imagine if a commerce student already had the first year or so of studies under their belt by the time that they become a senior in high school, and how much further ahead they would be on entering the work force or the world of business.

Similarly, consider the professional that begins to make a handsome income. If he or she has the skills that they should have, there is far less likelihood that they will end up with bills, commitments and payments that exceed their large income. All too often in the past and in today’s world, professionals and other high income earners are left to fend for themselves and are at the mercy of the ‘financial advisors’ for all their advice on how to manage their money and their affairs.

When there is widespread financial knowledge, there is a clear net benefit to society in general that has a greater value than just the increased performance in the economy.  There is a huge social cost to financial ignorance and to poverty. Many of these costs go far beyond the urgent needs of today to combat poverty.  By providing financial literacy we are providing the opportunity and the tools to break the cycle of financial ignorance and with it the pall that poverty can bring.

Till Next Time….

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Sigrid McNab

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About Sigrid McNab

Sigrid McNab is the author of #1 Amazon Best Seller, speaker and the CEO and Founder of sigridmcnab.com. Sigrid specializes in blogging, attraction marketing, and generating highly qualified leads. Sigrid teaches people how to build a successful online business.

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4 Responses to “Financial Literacy Part Two”

  1. Hale Yes Says:

    Sigrid,

    (Keep those subtitles coming.) I wish I was nearly as literate are you are on this subject!

    Regards,
    Dr. Hale
    Hale Yes recently posted…Dr. Hale’s Answer for Frustrated Marketers Looking for LeadsMy Profile

    [Reply]

    sigrid Reply:

    Sure will Dr. Hale!

    [Reply]

    Reply

  2. Peng Teo Says:

    Sigrid,
    Great information. You hit on the nail. Seeing what happened to the financial marker since 2008 in USA. In general it has affected all levels of society. Worse is the majority of the middle class who are lack of financial knowledge of the personal and economy in general, and got themselves into a big hole.
    Same piece of real estate, some see no money to be made, some think it will double the next year but has no knowledge of what it is zoned or any restrictions. Some see adjustable interest rate is the Free money, Osp! They forget they need to pay it back one of these days and maybe with a higher interest. It is not how much one can makes but how much one can retain. An average USA citizen save less than 3%, while most of other country people especially in the South East Asia, save 8% to 20%. Success in financial world is to be able to make money, save and reinvest wisely.

    Peng Teo
    http://www.pengteo.com

    [Reply]

    sigrid Reply:

    Teo,you raise some excellent points. Many people became investors without having the required financial education to do so. Our society’s low level of financial literacy is going to result in an economic hangover for some time to come.

    [Reply]

    Reply

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