Importance of Financial Education
Financial issues are mostly personal. They are the lifeblood of all meaningful decisions that include everything from holidays to retirement planning, the expenditures towards food, clothing and shelter. Every individual whether a government employee or a daily wage earner must be financially educated.
Following are the reasons as to why financial education is important.
- With every passing day, the burden to make sound financial decisions is resting on the shoulder of the consumer. Several organizations have changes their retirement plans from the traditional pension-based to participatory. In the latter, you have to pay part of the cost.
- While social security was seen as a prime source of revenue, it’s not the only source of retirement income. It’s more of a safety net these days that only provides survival and not any enjoyment.
- People are living longer. This means you have to accumulate more funds before retiring for covering the living expenses for a longer period of time. Else, you may become the burden of your family.
- The financial environment is changing much faster than ever. Bear markets, bull markets, rising rates of interest and an increasing number of financial articles that profess conflicting opinion that makes following a financial path difficult.
- There are an increased number of financial options these days. Credit cards, mortgages, insurance policies, mutual funds, gold investments; there seems to be a seemingly endless number of options. Taking a sound financial decision could be a complicated issue sans knowledge of the basic financial instruments.
- There are several financial service companies these days. Credit unions, banks, insurance firms, brokerages, mortgage companies, financial planners, credit card companies and others trying to rope you in as their customer.
- Expenses have increased manifold of late. Wages and costs have risen where affording even basic amenities could be forbearing after retirement. Knowledge of financial instruments is imperative.
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