What Matters When It Comes to Financial Literacy?
Did you learn about financial literacy as a child? The simplest meaning of financial literacy is to know how to manage your money.
Did you learn about financial literacy as a child? The simplest meaning of financial literacy is to know how to manage your money.
Did you learn about financial literacy as a child? The simplest meaning of financial literacy is to know how to manage your money. This management includes, and is not limited to, learning how to pay your bills, how to borrow & save money responsibly, and how to invest & plan for retirement. What do you wish you had learned earlier and what do you want to pass on to your child when it comes to financial literacy?
When it comes to financial literacy, these are the things that matter the most:
Financial illiteracy has emerged as a severe issue for the American population. We have noticed a sharp rise in financial mismanagement in the last few decades. Consequently, there has been a massive growth in debts, a steep fall in savings, and a lack of awareness in making any sound financial decisions. We can analyze the poor condition of financial literacy through the following examples:
Finacy is an app-based learning platform designed to teach personal finance concepts to children aged 6-18 years. The app includes interactive activities and systematically organized lessons on money & its history, savings techniques, budgeting, stock market & investing, and how the financial system works.
With the Finacy app, children can learn the concepts of personal financing, and parents can track their progress. The app also offers essential features like an allowance tracker and a savings calculator to help children manage their money. Financy’s goal is to teach children about financial literacy so that they can make more informed financial decisions as they grow up. As a parent, you can provide your child with this opportunity. Here are some essential topics that this app covers in its teaching module.
Simply put, we can define money as a medium of exchange. You can buy things against it or sell stuff for it. It is a commodity that people accept as a medium of economic exchange. It also represents the prices and values of goods & services. In the form of currency, it circulates to facilitate trades and measure wealth. Kids will learn that money holds different values and everything has its own cost.
In ancient times, people would barter or exchange goods & services. However, this method was confusing and inefficient as there is no fixed value of goods compared to others. As a replacement for the bartering system, different types of currencies developed over centuries that included certain commodities as a medium of exchange. Over a long period, these commodities took the form of modern-day currencies. Historians believe that money has been a part of human life for at least the last 5000 years. Kids can explore how different cultures use money and how history has impacted our view of finances.
Saving money is an essential aspect of wealth accumulation & secured future. Life is uncertain, and savings help you tackle those uncertainties comfortably. It gives you financial freedom & security and lets you take some calculated risks. Kids will learn the difference between wants and needs. They will also be presented with options for purchasing but also saving money for future situations. The goal is for kids to simulate healthy financial decision-making.
There are many ways to save money. However, starting with tracking your expenses is the most crucial. Once you know how much you spend, you can allocate your budget accordingly. Next, you can prioritize expenses, cut down on unnecessary spending, set a saving goal, and watch your savings grow. Parents can use Financy’s programs to continue the conversation about financial decision-making. Financy allows parents to bring the learning to life by contributing to their child’s digital allowance.
Budgeting is probably the most efficient way of attaining financial security. It’s the most effective tool that helps you understand where to spend money and prevent overspending. Besides, it ensures financial security for emergency and retirement usage.
A budget is a plan that decides how you spend money in a certain period. To create a budget, find out your total income and expenses. Their difference determines whether you are saving money or spending above your income. With a budget, you can manage where you are spending money and how you can save money. Kids will learn how to budget for items they both want and need. They will also have to factor in potential unexpected situations.
How would you answer your child’s questions about investing? It can be a complicated topic to break down. Investing is a method of generating profit or income by allocating money to a business or asset. The purpose of investment is to grow your wealth. How do you explain this to kids? Let Financy help!
You can start investing in multiple ways. For example, you can opt for the stock market, where you can buy & sell stocks of different companies. Or you can put your money on assets like real estate that give you healthy returns. Kids will be able to learn about investments and even potentially make financial decisions based on this knowledge.
A group of institutions that allow the exchange of funds constitutes a financial system. These institutions generally include banks, insurance companies, stock exchanges, etc. These institutes let borrowers, lenders, and investors exchange funds for different purposes. Your child will gain a better understanding of how financial institutions work and when to utilize each system.
Let Finacy help! We provide opportunities for kids of all ages to learn about concepts, like inflation, and more. Take the guesswork out of explaining how money works and let Finacy help your child make smarter financial decisions in the future.