MONEY MANAGEMENT: A SKILL NOT TAUGHT BUT HIGHLY NEEDED

As kids, we studied algebra, science, history, languages and the arts in school. However, no one taught us about money and financial planning. Many people don’t know the first thing about retirement, savings, credit cards, debt or even basic budgeting strategies till they’re in their 20s and 30s. Although some might say money management is something that should be taught by parents and not in school; they are a lot of parents who only learned the cause and effect of their financial decisions by trial and error and thus, are unable to effectively reach these skills to their kids.

According to a recent survey by the National Financial Educators Council, over 60% of all high school students failed certain questions about basic household financial management and were not given the proper role models for financial independence.

Across the world, the media has always highlighted examples of young adult celebrities who have mismanaged their money, losing homes or going broke. Even big businesses have gone bankrupt and the entire financial system of banking seems to be inadequate for financial inclusion. How then do we expect our youth and future generations to become financial literates amid a society that has accepted financial failure as a norm?

Money is a very broad topic, it encompasses so many areas that a person can spend days talking about it and only be scratch the surface. When talking about money one aspect that is quite often overlooked but is extremely important is money management There is a likelihood for most people to be more focused on increasing their income, researching investments, or learning about taxes, but than managing money.

People have a tendency to just get their income and just spend as wants/needs arise. If people learned some basic money management skills, they could be living a better life by putting their money to what is really important to them instead of what just comes up.

Things, like making purchases and regretting it later because you really had no use for it, would be avoided if people started to learn proper money management and apply it — as everything that is truly important to them would be covered; down to money set aside for retirement.

It’s very common to hear people say that they will start to manage their money when they have more money but what they don’t realize is that they will have more money when they start to manage their money.

We tend to attribute most of the world’s economic problems to the government and corrupt business owners when the problem is financial illiteracy of the common man. There’s a huge need for financial management practices to be taught early on to everyone. By teaching everyone how to become financially literate, we could create a society of great fiscal sense.

Simple and easy tasks, such as tabulating and charting your monthly expenses in different categories helps to control your expenses.

This also reduces the probability of allocating money to things that are not really important. If you want to become financially free and wealthy then you must budget your expenses — you must keep track of each and every money you earn. Reducing unnecessary expenses will help you divert more money towards buying some appreciating assets (Stocks, bonds, gold, mutual funds, real estate, etc).

So, the message here is simple, we need to push the agenda to start educating children about money and finance from an early age. Today, it’s not uncommon for children as young as age five to receive some kind of pocket money or allowance; even though there’s no problem with this, it must be done wisely and used as a tool to teach kids some basic money and finance skills.