Ways to Start Building Financial Wealth for Youths
In the modern-day economy, technology has played an important role in global civilization. Up till now, the era of internet applications has been gradually integrated into young people’s lives. With all these advancements, it is quite unfortunate to find that many people are still not financially enlightened. Among other societal problems, financial literacy is still a major challenge globally. In 2017, the OECD reported that it is highly important for many young people to acquire more financial knowledge. However, the rate is quite low among youngsters overall. The negative impact of a lack of financial literacy can be felt worldwide from personal relationships to the local economy. Financial literacy is the ability to apply a basic understanding of money management, financial security, and investment risks. On the other hand, there can be big economic problems when there is little or no knowledge about how money, budgeting, banking, savings, or investing work. Additionally, many children that were born several years ago are now transitioning into young adults, so it is important for their future.
For someone to be financially stable in today’s economy, you need to build your career to a certain level where your income can sustain your monthly expenses. To start with, it is a general belief that a good-paying job can lead to the ability to save some money and in turn invest your money towards wealth creation. Surprisingly enough, it does not happen in such a linear fashion. Many people are faced with inadequate financial literacy which unfortunately can lead
to blocks along the way. Primarily, it seems that basic money management skills such as budgeting, maintaining a checking account, managing credit, and perhaps saving are lacking. There are two approaches to address this issue, one way is to increase your income and the other method is to manage your spending smartly.
Why target youths and young adults?
It is easy to make many financial mistakes when there is a lack of knowledge and the earlier certain behaviors can be corrected, the better it is for future practices. Not understanding financial literacy is an obstacle faced by many developing or emerging communities as well as advanced societies throughout the world. A lack of financial education is affecting many individuals, families, and communities. It slowly starts to affect the local economy and eventually spreads out to the global level. Attainment and development of wealth management principles and skills are essential to growth at all levels. Studies show that personal finance education programs at later ages have a very limited effect. Also, it may help in preparing a young person for later years when facing real-life economic decisions like buying a house, understanding workplace benefits, investments, or saving for retirement. With a few basic financial literacy coaching sessions, it is always possible to be a “best budgeter” irrespective of one’s income level.