You have heard people saying that information is power. The same thing applies to financial matters. The more information you have about finances, the better-equipped you will be. On the other hand, a lack of proper knowledge and information about money is dangerous for any young person.

Why do we go to school to learn about science, math, history and other subjects? The answer is to empower us in those respective areas. Similarly, education about money should be given the same priority as other disciplines. Young people need to be empowered about money and how it works.

Statistics indicate that young people who never received proper education on finances end up as irresponsible adults, particularly on financial matters. They don’t know how to invest, they can’t save enough money to buy a home, and often have very poor credit scores.

These behaviors are contrary to those of adults who were taught about money management while they were young. Such people are able to make informed financial decisions in their adulthood simply because they had a strong financial foundation in their youth.

Often, young people involved in poor money habits such as gambling had no or poor backgrounds in financial literacy.

They can be easily influenced by others to engage in other poor financial habits. A person with a proper financial background won’t be easily lured to participate in activities such as gambling and Ponzi schemes.

Sometimes we are caught up in urgent situations that require large amounts of money. For a young person who is financially literate, it becomes a little easier to maneuver and come out of the situation compared to someone who is financially illiterate.

In other words, there are numerous reasons as to why financial literacy is important for our youth. They should constantly be taught about how to save, invest, budget and manage debts. Failure to do so can lead to a generation that’s not only irresponsible but also poor.

What are the benefits of financial literacy?

There are a lot of benefits we get from being financially literate. Let us take a look at some of them:

It helps us understand the value of money. When we understand the value of money, we are able to handle our finances in a better way. We will be able to know the importance of budgeting, saving and avoid unnecessary expenditures.

Financial literacy keeps us from being debt slaves. If you are financially literate, you will be able to cut your coat according to your cloth. That means you will only borrow that which you are able to repay.

It empowers us on how to invest and create wealth. Being financially literate generally enlightens us in various ways through which we can invest our money and generate more wealth.

It prevents us from making poor financial decisions. A financially literate person will not be easily lured into Ponzi schemes and gambling. This is because they understand the value of money and how difficult it is to earn it.

To sum it up, youth financial literacy in 2020 is very important. A person’s youth is a critical stage in life. The mistakes that you make as a youth will have a great impact on your adult life.

If proper education on money is provided at this stage, then we are bound to have a financially responsible adult generation.

Some other crucial points

Understand your financial condition in all phases of your life (and others)

Affects Pre-marriage and marriage

Affects your quality of life

Determines (sometimes) employment

Allows for independence in actions

Prudent financial decisions is evidence of good character and reliability

You become a good example to your family

One in every 10 Americans with a mortgage reports being late or missing a mortgage payment in the last year

Only 59% of young adults in Generation Y (ages 18-29) pay their bills on time every month

More than one-third of adults say the do not have any non-retirement savings. And though a majority is saving for retirement, more than one-quarter are not.

Almost half of those who closely monitor their finances are more likely to say they learned about personal finance from their parents or at home

Only one-quarter expect their income to outpace inflation

67% of middle- and high-school students do not know what the minimum wage is

72% of college students get (or have) a credit card; avg balance is $7500, and most have negative credit from that card before their sophomore year ends.

85% of students report that their attitudes and practices toward money come from their parents or home; 16% report never taking to their children about using money wisely

54% of parents have not discussed the difference between “needs” vs. “wants”

60% of parents report they have not adequately prepared for their child(ren)’s education expenses

One in three parents (34%) have taught their teen how to balance a checkbook, and even fewer (29%) have explained how credit it card interest and fees work.