Why Financial Education is So Important

Monday, 29 April 2019

I took a trip to the department store with my family one Saturday afternoon. I had just turned 16 and I noticed a huge banner that said, “JOB FAIR” on a well-known store’s entrance. I broke away from my family to go check it out. A woman ushered me into a small office, handed me a clipboard and told me once completed, to hand it to the HR representative behind a glass counter. I had no idea what I was doing but I figured I should go ahead and do as I was told.

About 30 minutes later, another woman called me into her office. Unbeknownst to me, I was going through the interview process. I got hired on the spot and was to start work Sunday. “I’m actually going to start making money!” I naively thought to myself with a big grin.

I went to go find my father to break the wonderful news.

“WHAT?!” he shouted as I finished my story. “You don’t even have a car! How are you supposed to drive to work?”

And that’s how I got my very first job. Somehow we made it work and working in the children’s department folding clothes was fun and exciting to me. When I received my first paycheck, I was doubly excited. A whole $230 dollars for 2 weeks of work! It was the greatest feeling ever. Mind you, this was in the 90s.

My parents had opened a credit union savings account when I was a kid. But I wanted to be my own person and went to a major bank just outside the mall. I opened an account and deposited my check. I was even given checks and a debit card. I spent all my money, not really knowing what I was doing. And of course, I incurred NSF fees when I spent over what I had in my account. Hard lessons learned. And the learning didn’t stop there. After I was approved for a credit card at age 18 from solicitors at my college campus, I used it like I was already earning an ample salary (fun fact: I wasn’t).

Unfortunately, they didn’t teach financial education in school. And my parents weren’t too comfortable talking to us about money either. In fact, a Wells Fargo survey found that 44% of Americans find it difficult to discuss finances versus other hot topics. So what was a teenager to do? Learn the hard way.

My story is just one example of the trouble young kids, and perhaps even their parents, go through every day. I have friends who make great money but are drowning in credit card debt. And older friends who don’t even know when they’ll be able to retire. The problem is very real.

The Statistics

According to Forbes, 44% of Americans don’t have enough cash to cover a $400 emergency. And 38% of US households have credit card debt. What’s more astounding: 33% of American adults have no money saved for retirement.

My first job at a bank really shaped my focus in wanting to learn more about finances. I wanted to learn what NOT to do. But I also wanted to learn how I could possibly save on such a limited budget. After lots of reading and lots of self-education, I conquered my goals and have been on the right path for a number of years. It IS possible to become debt-free.

The advantages of educating yourself on how the financial world works can have an incredible impact on your life. A few reasons can include the following:

Good credit scores lead to better rates on homes, autos and other loans.
Staying on top of your finances improves your quality of life.
Having a healthy knowledge of money secures your retirement.
Knowledge gives you peace of mind around money.

You don’t have to go it alone

Not everyone is born a financial expert. It takes time to build up your financial intelligence. And there are tons of resources at your disposal; KOFE being one of them. KOFE or Knowledge of Financial Education has many great resources you can utilize to help you get started on the path to financial freedom. It’s also free to We Florida Financial members.

Make a commitment to yourself but also to involve your family in getting educated. Visit the page on our website to learn more.

Sources:

Online Banking

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Why Financial Education is So Important