Financial education helps ensure that the financial sector of emerging economies establishes an effective contribution to actual economic and poverty reduction. Unfortunately, financial literacy is also critical for more developed economies, especially in ensuring people to save enough while avoiding bankruptcy and foreclosures.
Financial education can also be worrying for two reasons. According to the Organization for Economic Co-operation and Development, individuals generally have insufficient financial background or understanding to traverse the complex market and people also generally believe that they are already financially literate even if they aren't.
In the United States, a survey showed that many Americans lack the sufficient knowledge about their finances. That's why, both the federal and state efforts aim to increase financial education.
Not all financial education ideas, however, are effective. In fact, a research suggested that financial literacy may not always lead to better financial choices, NPR notes.
Luckily, there are many ways to teach financial education effective. So, here are 3 efficient ways to make financial literacy work.
1. Start young and take a lot of math classes.
Have you ever wondered why many people are buried in debt and loans? While others would blame the increasing prices of commodities, low salary and rising cost of living, the root cause of this is actually lack of financial education.
To increase financial literacy, it is more effective to start young and train more teachers, Life Health Pro reveals. But instead of teaching specifics, teach young adults how to find the information they'll need.
Millennial educators also suggested that financial education should be added to the elementary curriculum. Others also said that financial literacy should be primarily conducted at home, The Street reports.
In addition, taking more math classes also help in financial education. According to researchers, requiring high school students to take more math classes can lead to a more responsible financial behavior.
2. Study hard before making major financial moves.
Another effective way of financial education is taking a class on borrowing money before making decisions on having loans. Experts suggest that enrolling in highly targeted classes can help you make better financial judgments.
3. Get out and practice.
Since you are already studying hard, don't be afraid to put your knowledge of abstract financial concepts into practice. As for financial education teachers, encourage your students to practice their skills with the real thing.
Meanwhile, a recent study from accounting firm PricewaterhouseCoopers revealed that financial education (or a lack thereof) is indeed one of the main reasons for many financial blunders suffered by Americans. That's why many educators were suggesting that American schools should start teaching the youth about finance and money.
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