When I reflect back on my education I’m often left wondering why I was taught certain subjects and to such great detail. As a scientist I was required to learn advanced level calculus, differential equations, chemistry, and physics. It’s certainly nice to have some knowledge about these sciences. But I can honestly say I’ve never actually used much of that knowledge in practice.
We used to joke among ourselves as university students when we labelled certain advanced studies as “not career oriented”. Occasionally a bold student might even raise their hand and ask a professor the question we all had on our minds, “How does this apply to the real world?”
The purpose of education is to prepare you for a successful future. The ability to learn and adapt are critical. But let’s not kid ourselves the subject matter needs to be tailored to set students up for success in the real world.
It’s great to see the Ontario Government has recognized that a long ignored subject will now be taught in school: financial literacy. This is definitely overdue! It should be designed to prepare young adults for a lifetime of financial skills as well as protect them from fraud.
Why is this training so critical?
Most young adults have no concept of the most basic financial concepts. They do not understand a household budget, tracking expenses, taxes, investing, retirement savings, pension plans, RRSP’s, TFSA’s, emergency funds, or the importance of saving for the future. The reality is that many parents haven’t passed on these skills. Many have never learned them in the first place.
When it comes to financial literacy most young adults simply follow the trend and adopt the habits of their peers. Unfortunately those habits are all too often destructive and harmful to financial well-being.
Will financial literacy training really make a difference?
That’s a difficult question to answer and it depends on timing. For a fortunate few the training will make an immediate difference but I suspect not for most.
Financial literacy is a painful process learned by making mistakes and unfortunately many have learned the hard way. Yes. Many young adults experience financial hardships despite knowing better or being advised against their destructive behaviours. Why? Instant gratification, following the herd, living for the moment, overconfidence, arrogance, laziness, fear of missing out (FOMO)…. take your pick.
So how can financial literacy training help everybody?
Here’s where the timing part comes in. We all make financial mistakes. The question is will we repeat them? Financial literacy training gives people the opportunity to start over and do better. They know how to start over, fix their financial problem and do better. That’s the key.
There’s a huge difference between repeating your financial decisions that are harming you and knowing how to change those decisions to set yourself up for success. Financial literacy training provides the endless opportunity to be successful in the long run despite short term failures. It’s truly lifetime oriented training.
If you need a little help with financial literacy, here are some posts that you may find helpful:
Are You Financially by that River in Egypt?
Master You Money by Planning Your Financial Future
Simplify Your Finances and Simplify Your Life
Top 10 Financial Challenges for Millenials in 2024
In our world we are constantly bombarded with incentives to spend, indulge and take on debt. It’s nice to finally see training that will teach the importance of reasonable sacrifice and future planning. In my books I call this the ability to live sensibly for today while preparing for the future.
In my E-books (“Water Barrel” and “The Balance”) I discuss simple methods to live sensibly for today, take charge of your financial affairs, and invest safely for the long term. For more information please visit David Penna Amazon.
Disclaimer for ManageYourMoney.ca
The information provided on ManageYourMoney.ca is intended for educational and informational purposes only. It should not be taken as financial advice. The opinions shared are those of the authors and are meant to encourage sensible financial habits and decision-making. We recommend that you do your own research or consult a certified financial advisor before making any financial or investment decisions. All investments come with risks, and there is no guarantee of success. Past performance is not a reliable indicator of future results. Always consider your personal financial situation and risk tolerance before pursuing any investment opportunities.
As always, we are not a qualified financial advisors. We just relate financial management to our own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of ours came from expensive experiences.
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