As the current age of technology continues to grow, students and adults are forced to acknowledge the fact of a useful skill in everyday life that they have been ignoring since forever: finance and economy. Today, the world economy is developing at a rate more rapidly than ever, and finance is becoming a key role in everyone’s lives, with the mass inflation and competition in the job market. Money is coming out bigger than ever, and it is important for one to understand finances to manage their bank funds and wallets. It is not uncommon for schools today to provide finance classes, mostly in high-school levels and above. Ignored and deemed as a useless subject for a long time, the importance of finance classes is still coming to light. Many people thought that it was a subject that should be taught at home. However, with the recent implementation of the classes, it is clear that the courses are becoming popular and encouraged among peers. But, a new question has arised: Is financial intelligence really worth putting over academic intelligence? It’s controversial, and many people have many opinions. However, one fact is clear: Finance IS important.
Kids, at any age, will be curious about money, and it is important for them to learn about debt, how it happens, and the risk of falling and/or being in debt. At a young age, purchases are still being made by adults, but by the time of high-school, kids might try and use their own money to start buying different things. According to AmeriChoice.org, “This [12] is the time they’ll start to buy more or different items than they may have before.” By taking the correct classes, kids can also learn about the risks of debt, and how to control themselves over spending. For example, debt can lead to stress and anxiety, and cause focus problems. From debt.org, from 18 year olds to 29 year olds, there is $69 billion total in debt money, and $12,871 average per person. This is a lot, especially for kids so young. With finance courses, kids are able to learn to manage their money in a mature way, so they will not have to endure debt, and it's horrible consequences. With adequate classes, kids can avoid some of the most dangerous traps associated with money and learn about its benefits instead.
Apart from good money management skills, at a high-school and early career age, it is vital to look into your far future and plan for an adequate retirement account, to ensure your stability financially when you retire. A 401 (K) retirement account is actually becoming popular these days. 401(k)s let you contribute part of each paycheck into a retirement account, where you can generally invest your assets in various types of mutual funds, such as index funds or target date funds. The ability to invest in an account is a major motivation for this choice. For example: Investing your money gives it a chance to benefit from compounding returns and a potential to grow over time. However, 401 (K)s also involve tax advantages. From Fidelity, “Distributions prior to turning 59 1⁄2 may be subject to a 10% tax as an early distribution penalty in addition to federal income taxes.” Many of these reasons are why people are so motivated toward a 401(K) retirement account. Truly, it isn’t bad.
Although it is important for kids to realize the importance of retirement money, the most famous reason that finance classes are becoming needed is for budget constraints.
Teenagers and even kids might not realize the limits of money. To them, the money that parents hand them, whether from allowance or just a small sum now and then, comes from thin air and goes on forever. But that's not the case. If you don’t be careful, soon, your wallet will not be happy. According to a Gallup study, only 1/3 of American families prepare a monthly household budget. This would help immensely. As children develop into teens, their expenses grow, and their wants for their own possessions grow, too. For example, Taking Stock with Teen research suggests that a teen spends around 2,391 dollars yearly. “By teaching kids the basics of money and how to control money through a budget, you’ll be preparing them for the financial realities of adulthood.” says thebalancemoney.com. With proper reparation, kids can be prepared for the war of credit cars and purchasing in the future, as well as understanding why budgeting your money is so important: It keeps track of your finances and makes sure you won’t fall into debt or a money crisis, as well as distributes your money evenly among all your expenses. Instead of spending like crazy, you’ll be able to budget carefully.
All in all, financial intelligence is actually really important to kids. Not that academic intelligence should be ignored, but it would be helpful if finance and economy classes could be added to school curriculums, since it will help many kids manage their money better in the future. Apart from having good money management skills, being able to have a good retirement fund, and understanding budget constraints, kids should also realize the importance of the risks of falling in debt, maintaining credit cards, purchasing a home, and mortgage and loans. All of these skills are valuable in establishing a life outside of the one parents already provided. Say, you don’t want to fall in debt because you purchased a home and you took out too much money from the bank to pay for it. Financial intelligence is becoming more and more recognized and needed as the technology and economy grows in the current generation, and it is important that we recognize how money is beginning to play a big role in teenager’s lives. Financial skills are being put more and more to the test as inflation keeps going on, and the competition for the job market is tighter than ever. Hopefully, though, you will be able to learn money management in time to avoid all the traps you might face going on.
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