Saturday, November 29, 2008

Financial Literacy and... Accounting? (1)



Nowadays, in the midst of the financial crisis we're witnessing (and grappling with) whether we like it or not / lose money or not (hopefully not much), the need to read and understand financial information is not limited (anymore) to reading newspapers or watching the nightly news on TV; it implies now a bit more than that, therefore, financial literacy implies the need to only to read the news but having a basic understanding as to how financial information is created and issued.

In addition to reading and learning as much as possible about financial literacy, there is what I'd define as an underlying yet key issue: the attitude to understand that the financial crisis implies a complete change in the way we "average" citizens perceive financial markets as something distant from our personal well-being but... How about our financial well-being in order to avoid or at least minimize a "personal financial meltdown?"

How about if I tell you that in order to understand how your credit card works, you should understand what a bank statement is and as a consequence, learning accounting and therefore debit and credit basics? Hey, you shouldn't worry too much to learn about these basic accounting concepts unless you plan to be an accountant.

My personal commitment towards financial literacy is based upon the need to solve urgently a series of problems all of us are also witnessing; one of those problems is about students: the debt they are taking to pay for their education is growing because of the financial crisis and the credit crunch.

Once again, if all of us have the attitude to learn and pay a closer attention to our financial well-being, it shouldn't be difficult to understand that financial literacy is a key element to manage things better in these turbulent times.

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2 comments:

Chris said...

I agree with you. People need to really educate themselves about things like that. This article is pretty good.

http://www.gotoguy.com/?p=607

Mario P. Lopez said...

Chris,

Thank you very much for your thoughts.

You have an interesting page. If you agree, I'll create a link to your posts.

Regards.