Tuesday, November 17, 2009

Financial Literacy as an evolving learning tool... Why?

During the last few days, I've been noticing consistent evidence of people becoming more aware as to the urgency not only to acquire basic financial skills but to continue exploring more feasible and urgent alternatives to make teenagers learn those same basic skills thinking about what it can be defined as the ultimate financial - educational goal: help them to learn how to manage money more efficiently in these tough economic times with a -why not- long term goal in mind.

I think that the couple of videos accompanying these notes, reflect in a critic and realistic way, the difficult economic outlook where many people not only in America but in many other countries as well realize the critical importance of a more careful money management and not only its immediate but long term financial implications.

It's been already discussed on previous posts about the urgency for people to realize that things have changed radically and dramatically in many aspects being money the most obvious; in this regard, most opinions are coincidental as to why should financial literacy be taught.

Considering this evidence, let's think about "Help your children manage finances in a bad economy - teach them Financial Literacy early"; in my opinion, this article reflects clearly how Financial Literacy is an already evolving (and gradually stronger) learning tool for children, teenagers and adults.

Help Your Children Manage Finances in a Bad Economy - Teach them Financial Literacy Early

by John Davis

US has been facing its worst recession for the past few months. This should be treated as a reminder to all parents who are concerned about their child’s financial security in the years to come. Financial literacy should be taught to young adults by their parents. In fact making it a part of the school syllabus with all the nuances of financial management included would do well when they have to start college.

In the present day, college students are those who are relying more on their credit cards, compared to other segments that actively use them. Recently it has been found out that there is a steep 46% increase in the average amount of debt taken by college students, since 2004.

The main cause for this steep climb is because most of them use four or more credit cards at a time. So, by the end of the last year, on an average, a student is left with a debt of $7000. Even with such a bad financial condition, it is a pity to note that one-thirds of them never discuss about credit cards to their parents.

There has been a new act formulated with regard to the usage of credit cards to save the current economy from slopping down further. The new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 is primarily aimed at protecting college students and young adults, through the inclusion of a requirement that states that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.

Although the new Act can help to reduce large debts, financial literacy is an important factor to be addressed now. It is highly vital for young adults to learn to build their credit without actually owning a credit card. There are many online personal money management software, that offer free registration, and is very simple to understand and use.

Using budget planning software right from early college days can help them to save well and use their finances to pay for college education. Online tools help young adults to visualize their earning and spending pattern; set realistic budget goals and follow the budget regularly. Most of the personal money management sites provide instant mobile alerts on purchases and monthly balances.

Have a comment? Feel free to share with us!
Financial Culture / Cultura Financiera ©

Bookmark and Share

No comments: