When you were very young, your parents may have refused to buy you a toy because they didn't have that kind of money. While the blow may have been hard to handle at such a tender age, from that moment your parents were trying to make you financially literate. When you were given spending money for school and you had to come home with change and report back to mom and dad as to how the money was spent, your parents were teaching you to record and retrace how and when your money was being spent. They yet again made you financially literate when they handed you a R20 note knowing that what you wanted cost more than that. Budgeting was what your parents instilled in you, but somehow all these financial literacy lessons seem to have flown out of the window when you experienced earning power.
Your first pay cheque or stipend surely made you realise that you could use your money as you please. The first time that you earned allowed you to see that there is no need to report to anyone about how you are spending your money. Furthermore, having money in your possession means that you have the buying power to buy what you want when you want it.
But the saying, "Money doesn't grow on trees," that you have heard ever so often when you were younger stands true even you start to earn. You get paid according to every working hour that you put in. However, it is ever so easy to blow all that hard earned money within an hour. In order to maintain your financial stability, you need to maintain a credit balance from month to month and you need to save money for those rainy days. If you are in need of some financial tips that will take you far and make your bank balance stretch all throughout the month, we are here to help.
Here are the best financial tips we can give you:
- Budget, budget and budget.
- Save funds for retirement while you are at the heydays of your youth.
- Invest more than you spend.
- Establish the value of something before you make the purchase.
- Make sure debt is not part of your vocabulary.
With these tips, we cannot reassure you that you will always make your money work for you, but we can tell you that with these tips you will understand that you are working for your money and that you cannot treat it as if it does actually grow on trees. It is important to become financially literate from the moment you receive your first wage or salary. We are here to guide you financially.
Why is Financial Literacy Important for Youth?
With the youth of today being so caught up in the world of technology, it is most important to understand why financial literacy is important in these digital times?
It is important to be financially literate in these digital times, but it is equally important to be financially literate so that you understand that your circumstances are attributed to your financial status. Most people are ready to find scape goats when it comes to understanding why they are stuck in the same rut year on year. Making the right financial choices in the prime of your youth will enable you to make more attractive financial decisions in your future.
Financial literacy is thus being knowledgeable about everything from budgeting to investing. Financial literacy is knowing when you are getting your money's worth or when the value of something doesn't match the asking price. A financially literate person is thus able to take on financial responsibility and obligation without having to bat an eyelash.
Being financially literate is most important for the youth of today so that it can help them make better financial decisions when money comes into their hands. It is important to be smart with your wealth from a young age, so that your money can speak for you when you are older. Lastly, it is most important to be financially literate so that you don't have to face debt from such a young age.
Our Financial Guide for Young Adults
We mentioned our five financial tips that every young adult should consider. Let us explore each one in more detail. When thinking about finance, it is important to consider what finance and banking will be like in the future.
But for the moment, you need to think about how you can handle your finances by making the right banking choices today.
Budgeting
Most of the youth say that they wish to know how to make better decisions with their money. The best way to make decisions with regards to your money is to consider what is going out and weigh it against what is coming in. The idea is to make sure that you are always earning more than you are spending. The youth need to budget but further realising what their needs are and what their wants are. What you need has to be paid for and considered first. If any money remains, you can then consider spending the money on that which you want. With budgeting, you can plan to keep some money should any unexpected expenses crop up.
Save Funds for Your Retirement While You Are at the Heydays of Your Youth
One thing we don't consider while we are young and fresh is what will happen when we can no longer work. Retirement can happen at any age and for some it comes sooner than they may think. The best advice that you can give to any young person is to put some money aside for your retirement. Some companies do offer retirement annuity which is all well and good, but for those young people who don't receive a retirement annuity, the onus is on you to save some funds for your retirement.
Invest More Than You Spend
It is easy to feel that since you work so hard, you need to spend on yourself. However, we need to educate the youth that their hard-earned money can best be used if they invest in themselves. There are some great investment plans offered by many big companies in South Africa and it makes a world of a difference if you invest when you young so that you can reap more financial benefit and watch your wealth grow as you grow older.
Establish the Value of Something Before You Make the Purchase
Again, be careful of social media influence. With bloggers endorsing almost anything, it is easy for our youth to fall into the trap of wanting everything they see irrespective of how expensive it is. Earning money doesn't give you the right to spend your money without considering what you are spending your money on. If you have drawn up a budget and you stick to your budget, you will most probably avoid purchasing anything that is too expensive. However, you need to see if what you are purchasing is worth it before you make the purchase.
Make Sure Debt is Not Part of Your Vocabulary
With correct budgeting practices and by not overspending, you can spare yourself from incurring any debts, especially when you first start earning. Debt can be avoided if you don't fall into any traps. Be sure to consider investments wisely before you put all your money into an investment that will lead to a loss rather than a profit. Also be weary of bitcoin and other such investments before you take the risk. Always check before you choose to put your money anywhere.
Young adults need to be clued up on how they can make their money work for them, however, financial education should not only begin when young adults start earning, financial education should be taught in high school.
Why is Financial Literacy Important for High School Students?
High school students study subjects like accounting and business studies which do help them to understand finances better, however, learners in high school should be taught how to make more financially beneficial decisions before they even decide what to study beyond high school. Financial literacy and being financially educated is most important for those high school students who are planning to run their own business or that of their parents after high school. For some learners who will not study beyond university, knowing how to be financially literate when they leave school is extremely important. High school students are mature enough to handle the topic of financial literacy and thus teachers must not shy away from the opportunity to make the youth all the more financially literate.
Financial literacy won't only be useful for your high school students while they are in high school, but it will be valuable for them throughout their lives. As a teacher, you may be wondering why exactly a subject like financial literacy should be taught at schools and we have some reasons why we think this is an essential subject that needs to be introduced in all South African schools.
Why Should Financial Literacy be Taught in Schools?
We have already mentioned how important financial literacy is for young adults, but why should financial literacy be taught on schools? Firstly, there are not many adults to date who can calculate their own taxes. For this reason alone, financial literacy needs to be taught at a school level. Aside from the fact that adults don't know how to make their money work for them, we believe that including financial literacy education as part of the curriculum may lead to meaningful discussion and debates at schools. You can encourage high school students to talk about how their attitude about money impacts the way they choose to spend their money. You could also start a meaningful discussion about the benefits of investing and who actually benefits when someone chooses to invest.
You would be surprised to know that most high school students don't even know how to go about opening a bank account, the procedure of transferring funds online, or even how to keep their credit card details safe, and for this reason we deem it necessary to introduce financial information and financial literacy studies to school children.
"We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate," Robert Kiyosaki
*Disclaimer: The content of this article is intended for information purposes only, and should not be considered or used as financial advice.
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