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The Importance of Financial Education

Updated on February 17, 2016

My Inspiration

Growing up in a house where money was not an issue I had a privilege that I was unaware of. I work for my money just like anyone else, but I have my parents to help me through life experiences such as attending university. Ultimately, the money I work for becomes my own that I willingly spend on random escapades. Debt was a concept that never even crossed my mind until I began my favourite novel series: Confessions of a Shopaholic. It suddenly became clear to me how simple it is to throw your money away until you find yourself stuck in a cage with bills surrounding you. While I was in grade eleven, I only received a short unit about personal finance; therefore, I hardly have any concept on the subject of paying taxes, working with budgets, or maintaining and paying bills. The issue is that schools provide nearly no education about the topic of personal finance. School is about educating children on matters that will benefit them in their future. If the education system deems chemistry, biology, or algebra as important subjects for children to know, why is personal finance hardly considered? The lack of education that schools provide about personal finance can ultimately lead to a personal economic downfall for people in their adult years.

Photo by pathdoc
Photo by pathdoc | Source

My Story

I had stated earlier that I get caught up in shopping adventures from time-to-time, without debating the consequences of spending. Although my parents explained to me the importance of saving, school never touched on the subject. When I got my first job, I was excited about the income going into my bank that I began to spend my money. From the point I began to spend my own money it seemed as though I began to spend more every year. My best friend, a fellow shopping lover, and I would go on daily trips to the mall to see what was new for the season, and of course, we stocked up. When I began to read the novel Confessions of a Shopaholic, I started to notice similar patterns with the protagonist’s experiences with my own. The protagonist, Rebecca Bloomwood, loved to shop, and she shopped until she was thousands of dollars in debt. Although I never use my own credit card, spending with your interact card can do just the same. While reading I was reminded of one specific part in the novel where Rebecca thinks, “Ok. Don't panic. Don't panic. It's only a VISA bill. It's a piece of paper; a few numbers. I mean, just how scary can a few numbers be?” (Kinsella 138). Rebecca’s story influenced me to tally up my recent expenses, and believe me, I was shocked. Left in my account was a sad $250.00 where only eight months earlier I had about $4000. Devastated from learning this, I began to panic and decided I needed to change my ways. It occurred to me how easy it is to spend without realizing how much you are spending and how much you have lost. Although I take full responsibility, I also have a belief that if school had a personal finance class which taught me the importance of saving and the possibilities of debt, I may have figured out earlier not to blow every dollar I earn.

Recently, I have considered many situations that I have come across which have been difficult because of my non-existent knowledge about finance. The first memory that comes to mind is the time I started my job as a program coordinator. To be a program coordinator means I am planning various events. Trust me, booking special guests for events is not always free, or cheap. This was the first time in my life that I was given a budget to work off of, and I had no clue how to work with my given budget. I was given budgets for decorations, for special guests and activities, and for materials needed throughout the summer and I had no idea where to even start. My memory of my first time working with a budget reminds me of Kinsella’s novel because Rebecca is a journalist for a financial magazine. Since Rebecca clearly has issues with her own finance, she has no idea how to write about finance or what financial terms even mean. Kinsella’s main character reminds me a lot of myself. If I was given education on personal finance, perhaps I would have been able to figure out how to work with budgets and create excel sheets beforehand.

Another difficulty that I face, because I was not taught the simplicities of personal finance, is paying a bill. I have never paid a cell phone bill, an electricity bill, a hydro bill, or even a rent bill. From kindergarten to grade twelve, I was never exposed to the world of finance and bills, school hardly touched on the subject. Therefore, I have no concept on how to do something as simple as paying a bill. It is a possibility that if I had been taught about bills and finances in school, I would not receive a bill and pass it along to my mother to help guide me through the process. Schools need to teach more about personal finance, especially about taxes and bills, so that children can grow up and not struggle with their own personal finance in their adult years.

Why Should We Educate Children about Finance?

A current issue in many countries is household debt. In Canada, the Global News wrote an article which discusses the rise in household debt where one dollar and sixty-three cents is owed for every dollar of disposable income (Psadski). Perhaps if people were taught about personal finance and savings in school, they would know how to prevent situations such as debt. A text written by Margeret Clancy, Michal Grinstein-Weiss, and Mark Schreiner states that, “Savings provide the economic security of a safety net. By transferring resources from the present to the future via savings, individuals are prepared to face unexpected and irregular financial circumstances” (3). If what they state is true, why is no one given this information? Why was I not given savings information in school? If the people had knowledge about savings, then I believe household debt would not have risen so high. Household debt is something I fear of happening in my future and want to avoid. Issues like the rising household debt crises cause me to question why personal finance studies is still not introduced to schools. If people become aware of personal finance, savings, and debt, then there is a possibility that less people will face financial issues like Rebecca in Kinsella’s novel.

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Final Opinion

After researching and thinking about the topic of personal finance in my own life, I have come to the final decision that I truthfully know nothing when it comes to savings, budgets, taxes, and bills. I took the liberty of reading through a finance book which taught me ideas to help me learn to save and budget. The part that stands out to me the most is, “It is important to teach a child the value of delaying purchases for things, not impulsively buying just because someone wants it” (Tucci 250). Tucci’s delaying lesson is now a lesson I have taken in my own hands. Before, my eyes would wander through a store and grab what I wanted, and I admit, sometimes I even purchased without checking the price tag. My ignorance has caused me to lose a lot over the years: money I could have been saving for university, finance lessons that could have allowed me to not be so dependent on my parents, and maturity for being intelligent with my purchases and making the right decision. I believe that I would not have lost so much if I had been introduced to personal finance in high school. But since I was not, my new motto when shopping is one that I picked up from Kinsella’s protagonist which is to hold the item I wish to buy in my hand and ask myself, “Do I really need this?” (163) and most of the time that I will ask myself that, I now know what the answer will be, or at least should be. If countries taught people personal finance growing up, as they all should, then maybe society could avoid the burning pits of debt that people now have been exposing themselves to.

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Now for your opinion

Do you think it is important to educate children in schools about personal finance?

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Were you educated about taxes, bills, finance in school?

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For those who were educated

Do you feel that being educated about finance has benefited your life?

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Comments

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    • florypaula profile image

      Paula 

      3 years ago

      Society and media teaches us to spend as much as we can, as often as we can and on anything we can get our hands on. New technology becomes a must and designer clothes become a label of our status. I didn't had rich parents, although I thought so when I was a child, but they were smart enough managing their money in order to give us the things we needed and save something too. They also taught me to do my research well before purchasing anything, and to think 10 times before buying something that I am not sure I will need it or use it. Great hub.

      Have a nice day.

    • Christy Maria profile imageAUTHOR

      Christy Maria 

      3 years ago

      Thank you Kristine!

      I really hope that there are changes in the future when it comes to schools teaching children about personal finance. Also, the shopaholic series is honestly one of my favorites. I hope that you enjoy them as much as I have whenever you get the chance to read them!

    • kristinekaren profile image

      kristinekaren 

      3 years ago from Philippines

      I agree,financial education should be taught at school and be included in curriculum or if not parents are to be responsible.Your story is a very informative learning experience.By the way I think I'll include Confessions of a Shopaholic on my reading lists.

      Voted up!

    • Christy Maria profile imageAUTHOR

      Christy Maria 

      3 years ago

      It is crazy how easily they suck you into their "deals" and whatnot. I know something I also used to fall for when just shopping was when a store says, "It is two for twenty."In your head you think you are really saving money when in reality, did you really need two of the same item? Even if I get it in a different colour. Now I know that I really do not need two of the same sort of item. I make a mental list on what I am shopping for and purchase only what I know I need. There are so many tricks out there that the world is playing to try and take all of your money!

    • serenityjmiller profile image

      Serenity Miller 

      3 years ago from Brookings, SD

      Touché, kbdressman! It's alarming to see from personal experience how these types of everyday financial situations can spiral so radically out of control. I even had a relatively good head on my shoulders when I started out... I had a "real" job in high school, I made my own car payments as a teenager, and I took out a modest credit card that I paid off each month to build up my credit score as a young adult. But a funny thing happened in my early twenties... the more money I made, the more credit I could obtain, and the more stuff I could "afford," the more debt I took on! That was just what people did, I thought, and there was no one to tell me at the time that debt is not the key to life. When we look at all the messaging we do receive, constantly encouraging us to spend beyond our means because we "deserve" to, the future becomes a scary place!

    • Christy Maria profile imageAUTHOR

      Christy Maria 

      3 years ago

      Hello everyone!

      Thank you for the positive comments about my hub.

      Jennifer I have absolutely no problem with you sharing my hub, in fact, I invite you to! I also have watched the shopaholic movie which is what originally got me into reading the novel series! It is also one of my favorite movies!

      I am happy to read all of your stories because it is helpful to compare with others our struggles and really proves the fact that we should be educating children about personal finance. I am so fortunate to have my parents to constantly back me up; however, I am the type of person that continuously tells my parents that I do not want to just survive off their money. I want to learn financial responsibility for myself. There are many others out there that are not as fortunate as I am when it comes to parental support. Many people my age go through secondary school entirely on their own, just like you kbdressman. Perhaps if we were educated in high school we would understand finance so much better than we do.

      I actually wrote this article as an assignment and before I uploaded it last night I added the section about the money in my bank account. The reason I added that last section is because it was only last week that I found out I have $250.00 in my account. It was then I realized that something has to be done about this issue. Of course I cannot blame everything on the fact that I was not educated, but I strongly believe that is partially the problem.

      Anyway, I appreciate all the great comments and stories you guys have shared with me. Maybe if we continue to share this story, more people will see and understand this issue. Perhaps one day this story can fall into the hands of someone important enough to make a difference.

      Thank you guys!

    • kbdressman profile image

      kbdressman 

      3 years ago from Harlem, New York

      Oh no serenityjmiller, if we add personal finance to the high school curriculum we might not be able to spend as much time teaching students how to do advanced calculus problems by hand that their calculators could solve for them in fractions of the time anyway! ;-)

      I 199% agree with this hub. I got married last month. Over the last few weeks we've had all sorts of fun conversations like, "Which utilities do we need to have put in our names?," "What are our options for paying off student loans?," "How does one purchase insurance?" "I want to pay off our debt as soon as we can, but shouldn't we keep a small financial reserve just in case something comes up? How do you balance savings, investing and paying off student debt?"

      If someone had sat me down when I was 18 and said "defer your scholarship for a year and work so you can afford school I'd've been so much better off! Instead, I worked as many hours a week as my university would allow all through school with many summer weeks of overtime hours just trying to keep my head above water. My grades suffered from having to work extra hours to manage to afford the cost of living and having to pay off having lived the years before too and I have nearly $35,000 in student loan debt to deal with now too! A little education could have made a big difference!

    • serenityjmiller profile image

      Serenity Miller 

      3 years ago from Brookings, SD

      Very good topic! My husband and I went through Dave Ramsey's Financial Peace University back in October, and it changed our entire financial outlook. Within eight months, we paid off all our debt except for student loans AND bought our first house together. As we've shared our experience with others, we keep hearing the same comments about how so many pepple never learned even any basic lessons in personal finances back in school. Why, oh why, isn't this a required subject right along with core mathematics?

    • Jennifer-Louise-W profile image

      Jennifer-Louise 

      3 years ago from Nottingham

      Upvoted! Do you mind if I share this?

      I found it very interesting and completely 100% agree. I left home at the tender age of 16, and like you, was quite priviliged in that my parent's sorted out any finances up until that point. I found it incredibly difficult to begin with, and I didn't know where to start! I now run my own business, so have to do my own taxes too (unlike being employed, where the employer usually does this for you). I've learnt so much about personal finance in the past 7 years, and am grateful for that. But, a little warning of how scary finances can be would have been nice, even better some education about it!! I received no education on personal finance, tax or anything of the sort. It's really disappointing to know it's not just within the UK that students don't learn about these crucially important topics. Great article!

      PS. I would highly recommend the 'Confessions of a Shopaholic' film! It's great, and really made me evaluate my own spending.

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