The Importance of Financial Education for Students: 5 Key Reasons

Youth financial education promotes informed decision-making, minimizes risk, and thus can increase financial security for youth. Low levels of financial literacy and lack of understanding about personal finances can lead to bankruptcy, illiterate retirement planning, vulnerability to financial fraud, excessive debt, and social problems, including depression and other personal problems.

It is important to remember that today's students are the future financial market participants, taxpayers, depositors, and borrowers. That is why it is advisable to start financial literacy education at the initial stages of the educational system.

Why is there a need for financial education in society?

In today's society, there is an urgent need to develop a culture of entrepreneurship, skills, and behavioral norms to start your own business.  Assistance to the unemployed and assessment of personal qualities necessary for private entrepreneurship is reflected in most successful financial literacy programs.Well-informed and literate consumers highly demand the quality of goods and services. Thus, they contribute to their quality and stimulate healthy competition among their suppliers, favorably influencing the price policy, creating conditions for effective market regulation, and growth of healthy competition among sellers of financial products and services. In the long run, all this leads to reduced prices and control of the inflation rate.Most international experts believe that the earlier students learn about the role of money in private, family, and public life, the faster useful financial habits will be formed. These habits will help them avoid many mistakes as they grow up and acquire financial independence. They will also lay the foundation for financial security and well-being throughout life. Financial literacy should be fostered over a long time based on the principle 'from simple to complex.' It should be a repeated repetition and consolidation process aimed at practically applying knowledge and skills.

5 reasons why financial education is important for students

Reasons for the importance of financial education for students are confirmed by world practice:The particular financial vulnerability of the younger generation is due to the mismatch between the available material base and the needs of young people and families.

The increasing importance of competent financial behavior of parents for the upbringing of children.The active consumption by young people of financial products and services is associated with increased risk.They need to understand and form their pension savings early.

The growing importance of competent investment behavior, both for the national economy and for the future as a whole.

Although the social and economic effect of improving students' financial literacy is manifested gradually, the world experience proves the indisputable need for this work and the inadmissibility of delay in solving this problem. Right now, students worldwide can financially educate themselves using educational platforms like Studocu. It is a platform with millions of learning materials on different domains.

Why is it necessary to introduce financial education into curricula?

The need to introduce the concept of financial education into existing curricula is relevant for all countries. International experts highlight the following main reasons for the necessity of such integration:It makes it possible to cover all population segments, regardless of social and financial status. Thereby the bases of knowledge and skills are laid by the whole generation.

The proportion of students making financial decisions earlier (pocket money, cell phone expenses, Internet, etc.) is rapidly increasing.

It is at an early age that not only the foundations of culture are laid but also the impetus for lifelong learning.

The main goal is to find the best option for incorporating elements of financial education into the existing national educational program of different countries.

Conclusion

A good level of financial literacy is necessary for each person to achieve his/her personal financial goals and to ensure the life cycle. Whatever the specific goal, the gain from financial literacy will be improved living standards and confidence in the future, stability, and prosperity of the economy and society.