Ideas and concepts expressed in this article are U.S. specific. However, we feel there are enough commonalties among our readers that the information is still useful in a general way.
It is a sad truth that in the developed nations young people receive very poor or no financial education. That is especially troublesome when one realizes that finances are a very important part of life; one where mistakes can be extremely costly. It is important to learn responsible money management strategies early on, in order not to adopt poor spending habits. Additionally, knowing the importance of financial management can help avoid or minimize debt, making it less likely that a person will become trapped in a cycle of lifelong money struggles.
While in some cases personal finance education can happen in the home, it is evident that not all parents are capable of teaching their children about personal finance as they have not received any themselves (and may be doctors, engineers and lawyers).. In our office, we have been very proactive in this area. In addition to organizing financial education/cash management seminars we always attempt to connect with clients and their children and provide further education. We routinely recommend books about responsible money management and counsel about similar topics.
When learning about personal finance, there are many topics worth exploring. Some of the more useful ones are the importance of spending less than one makes, reconciling one’s account (very important to understand what the software is actually doing), understanding debt (the main culprit of the 2007/2008 market crashes) and the consequences of having a low credit score. Having an understanding of such topics allows one to make better spending decisions, in order not to find oneself in a never-ending cycle of debt.
It is especially important that students transitioning into post-secondary education have a basic understanding of typical tuition costs and know how much of their future income will be tied up in student loan repayments. After all, many students who enroll in post-secondary education later leave with huge student debts. If one plans to continue their education by attending a post-secondary institution, it’s crucially important to learn about personal finance.
We always advise the young adults that exploring the topic of personal finance may seem overwhelming at first, but it’s still something that they really should do to ease their transition into adulthood. To help keep from becoming overwhelmed, we insist they seek outside help whenever possible and work through the topics a little at a time. By tackling the subject in stages, they gradually gain a deeper understanding of how personal finances work. That way they can strengthen the money management skills before facing any serious financial decisions.
by Mike Djordjevich
321 High School Road #303
Telephone : +1 661 645 5572
Email : firstname.lastname@example.org
Website : http://www.mdj-cpa.com