The number of financial decisions people face and the variety of financial products available to them continue to grow. Many young people do not understand what a bank account is, how to use a debit card, how to invest in stocks, or how to calculate their credit scores. Even important topics like choosing a college and what kind of career they want to pursue are not well understood by students. Thankfully, there are many ways to gain the financial knowledge you need to make good financial decisions.
Budgeting
Financial education is essential for young children. It starts as early as kindergarten and can help them become smart consumers as adults. Organizations like Next Gen provide free personal finance curriculum and professional development to teachers. Their lessons cover topics like saving for college, understanding consumer credit, and managing a checking account. Students can choose between interactive and self-guided lessons. Sidney Strause, who is a graduate of Harvard University, took Everfi lessons when she was in junior high school. She watched the lessons in the privacy of her home and discussed them with her mother.
Investing
The lack of financial education in our society is one of the leading causes of serious money problems. Fortunately, education is a powerful tool to improve money management and prevent the pitfalls of investing. Unfortunately, one third of adults surveyed could not answer a simple set of financial literacy questions. Those who are younger and people of color exhibited lower levels of financial literacy than their white and African-American peers. Unfortunately, only one in six 15-year-olds reached the minimum level of financial literacy.
Saving
A recent study of course catalogs found that one in six high school students is required to take a personal finance course. During the course, students will learn how to manage their spending, save money, and invest money. The least important skill was how to use compound interest. In addition to budgeting and money management, students will also learn how to file taxes. The results of this survey show that students need to learn more about personal finance to make better decisions in their financial lives.
Investing for a college education
While you’re in college, you’re facing many changes, from balancing the demands of school with personal responsibilities. Now is a great time to start investing. With only a few hundred dollars available, you can begin to build a portfolio without risking a huge sum. Learn how to invest and develop your own investment philosophy while you’re in college. If you’re not yet an experienced investor, start small and gradually increase your investment portfolio as you gain experience and knowledge.
Investing for a home
In the past, homeownership was considered a wise investment. Interest rates were higher and jobs were often secure for decades. Pension benefits were guaranteed. Most retirees lived comfortably, thanks to these benefits. But today, there is little hope for long-term security. People seldom keep the same job for decades, and the interest rates are lower than they were during the post-war years.
Saving for a down payment on a home
Many Canadians aspire to own a home but find it difficult to save for a down payment. The good news is that there are ways to achieve your goals. One of the most practical and effective ways to free up income to save for a down payment is to pay off all of your debt. Credit card debt, student loans, and car loans are the biggest expenses people have when saving for a down payment.
Investing for a down payment on a home
Investment for a down payment on a home involves using money earned in the stock market to make a down payment on a house. The Real Return on Investment (RoI) is the nominal return on investment less the rate of inflation. This type of investment requires a lot of discipline, but the rewards are worth it. It is possible to achieve this goal by following some simple guidelines.