Why Should I Learn About Money?
Why should I learn about money? Is financial literacy really that important for teenagers? Unfortunately, money is a vital part of our lives whether we like to believe it or not. It is what we use to buy the things we need and want, and it’s a requirement for survival with things such as food and shelter.
However, many teenagers do not understand the basics of money. They may not know how to budget, save, or invest which can lead to financial problems in the future, and it can start from a young age. Let’s evaluate why everybody should learn about money.
Why Is It Important to Learn About Money?
There are many reasons why it is important to learn about money. To handle it we need to know the basics, and to earn it we need to understand how it works. Here are some more reasons to start thinking about the value a money understanding will serve you.
- Financial independence: You will be able to manage your money and make your own financial decisions.
- Avoiding debt: You’ll gain the ability to create a budget and stick to it. This will help you avoid overspending and accumulating debt.
- Building wealth: You’ll become confident enough to save money and invest it wisely. This can help you achieve your financial goals which may include big purchases such as buying a car or a house.
- Preparing for the future: You will be able to save money for emergencies and unexpected expenses. This can help you avoid financial stress in the future, which is something most people run into at some point in their life.
How Can It Impact Your Life in the Short Term?
Money will impact your life in many different ways. Whether you have your first job, car, or credit card, having access to funds can change the way you live. It can also dictate your decisions. Here are some positive ways that your daily functions may be affected by understanding how money works.
- Better spending habits: Knowing what it takes to earn money can help you avoid overspending and accumulating debt.
- Less financial stress: You will be able to manage your money more effectively and avoid financial problems. Financial stress often occurs from overspending and the sooner you know not to do it, the longer you’ll stay stress-free.
- More financial freedom: You will be able to make your own financial decisions and achieve your financial goals while you are in control. Want a nice lunch? No problem if you have money.
How Can It Impact Your Life in the Long Term?
Learning about money can also have a positive impact on your life in the long term if you take control from the beginning. Your long term may include goals such as college, a home, or perhaps even a family. Money will have a significant impact on this. Here are examples of how you’ll benefit long-term by understanding money.
- Allow for financial security: Learning about money can help you achieve a sense of financial security. You will be able to save money and invest it wisely, and not have to worry about daily necessities if you have money in the bank. As an adult, financial security can help you sleep well at night.
- Create financial opportunities: Learning about money can help you create more financial opportunities and allow you to act on them as they come along. You will be able to invest in stocks, real estate and other assets, or perhaps start the business you’ve always dreamt of. This can help you build wealth and achieve your financial goals down the road, and perhaps even retirement if you’re looking far enough ahead.
How Can You Start Learning About Money?
If you understand the need to learn about money, there are many ways to learn. The best way? Read and take action. Here are some tips for getting started with money, and things you can do to practice while you learn.
- Create a budget: Creating a budget is the first step to learning about money. You should track your income and expenses and create a plan for your money. Where will you spend? How much? How much will you have? Are you earning? All these things matter in your budget.
- Start saving money: Saving money is an important part of learning because you’ll soon run out if you don’t save. You should set aside a portion of your income for savings and learn to only purchase what you need… and at a good price.
- Invest wisely: Investing is a great way to build wealth. Start to learn about the different ways to invest and what works for you. Watch videos, read books, and follow people who have done what you want to do (like Warren Buffett). The key is to start practicing. Any amount of money is good enough to start the learning process and if you’re too young, sign up for a practice account.
- Get help: If you are struggling with money, don’t be afraid to ask for help. If you don’t know something, ask. You can talk to a financial advisor or a trusted adult for guidance. Asking is the hardest part. Once you get an answer, you’ll be well on your way.
Just Get Started
With the world getting more expensive and concerns like the cost of living and inflation hitting the news daily, learning about money is essential for every teenager. It can help you become financially independent, avoid debt, build wealth, and prepare for the future without even falling behind in the first place.
Basic financial literacy can also positively impact your life in the short and long term. By following these tips, you can get started on the path to financial success. Keep reading, ask lots of questions, and most importantly, take action to learn about money.
By: Robert Puharich | December 8, 2023 |
