At a time of global financial turmoil when countries like the United States are facing some of the greatest financial crises since the Great Depression of the 1930s, the importance of personal finance literacy has never been greater.
In a study published by the Milken Institute this year, about 57% of the American adult population is financially literate. While most parents acknowledge that they are responsible for providing their children with knowledge about personal finance, 31% admitted that they have never really discussed it with them.
Currently, only 24 states nationwide require high school students to take a stand-alone personal finance course to graduate. According to financial literacy advocates, this number is too low. Research indicates that having a basic understanding of personal finance will help Americans make smarter decisions with the money they earn. This is why there needs to be more awareness about personal finance through the school system as well as in homes.
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Personal finance courses for adults
As an adult, financial literacy is integral to improving one’s quality of life. Here are some pointers on why personal finance courses for adults are crucial.
A 2019 study found that the total credit card debt that Americans owe is more than $800 billion, and that adults aged 18 to 29 have credit card dues that last more than 90 days. In 2022, that debt reached $925 billion, according to LendingTree.
It was also revealed that in 2020, around 28% of adults reported a scenario where if they lost their main source of income, they had just enough money to support themselves for a week. Only 15% of respondents thought they had enough savings to last three to six months.
Again, in 2019, when asked what part of their financial finances worried them the most, 17% of adults said they worried about not having adequate retirement funds.
In terms of managing personal finances, there are certain basic skills that an individual must develop. They must know how to prepare a monthly budget. They must learn how to save money each month and save it to build a long-term savings fund. They should practice paying their bills on time instead of delaying them and paying unnecessary fines. They also need to track their credit score. Personal finance courses for adults can help develop and master these skills.
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Is it easy to learn personal finance?
Learning personal finance and practicing financial discipline is not necessarily easy for everyone. Like any subject taught in school, some students learn it faster than others. However, having a comprehensive understanding of how to plan ahead and achieve your financial goals will have a profound effect on your life.
So what is personal finance? Basically, personal finance involves the optimum money management and other entities with financial value, such as property. This involves being aware of your daily expenses and how this affects your personal wealth, using credit card, understand interest and how to make it work to your advantage. It’s about planning for your family’s future needs in different scenarios.
Personal finance is also about understanding different financial products, such as insurance, loans, various types of bank accounts, and stocks, and how you can fit them into a portfolio of assets to build your personal wealth. More than just saving money, personal finance is about having an ingrained logical understanding of market conditions, what affects it, and where and when to invest money in different case scenarios, so that your financial situation remains strong in the most difficult and wider economic life. situations.
So basically, while not easy for everyone to learn, having a reasonable understanding of personal finance is crucial for your well-being and that of your family.
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What do you learn in a personal finance course?
In a typical personal finance course, you will learn the following concepts:
Core Fundamentals
These include budgeting, the importance of credit rating, cash flow, how to set financial goals, and various taxes.
Economy
This is about how to set savings goals in various situations and eventualities, such as buying a home, investments, college for your kids, critical emergencies, etc. You will learn the importance of compound interest and how to set goals for your retirement fund. and know the precise amount to set aside at each stage of your financial life. You will learn how to set these goals taking into account your personal interests, your spending habits and the quality of life you intend to maintain.
Debt management
This is a crucial segment of personal finance. Here you need to understand how to assess your current financial situation, determine the amount of debt needed to achieve your goals, and find the optimal way to effectively pay off debt. You will learn about various debt products, such as loans, credit cards, and mortgages, and how best to leverage them.
Investment
This segment deals with how to achieve financial growth through investment. You will understand the different investment tools, how to take calculated risks and build a diversified financial portfolio optimized for maximum returns and minimum risk. Additionally, you will understand the different dimensions of investing, such as passive and active investments, and the fees and taxes associated with them.
Risk management
This segment involves protecting your financial goals from expected and unexpected events. You will understand various insurance products and how they can fit into your long-term financial plan. It is crucial to protect your financial planning across these products, a comprehensive understanding is therefore imperative.
Free Personal Finance Course Options
There are plenty of free personal finance courses online. Most courses can provide you with at least the basics to help you achieve your financial goals.
- Personal Finance 101—This basic course from the Udemy educational platform is a great place to start. The three-hour course consists of animated videos through which you can learn about the fundamentals of personal finance through topics ranging from the optimal use of credit cards, saving for college fees, to planning for your retirement. Although you have to pay for a certificate of course completion, the actual content is accessible for free.
- Introduction to managing your personal financial debt—Available on Alison, this course is a great starter course for people who want to understand how to pay off debt in a practical and effective way. It also shows you how to organize your various credit card and loan debts using spreadsheets, and teaches you how interest rates can be negotiated with institutions that issue loans and credit cards. The three-hour course is free, and you can get certified as an Alison graduate if you achieve over 80% on an assessment.
- Create a budget with Google Sheets—This personal finance course from Coursera, another reputable digital education provider, teaches you the incredible possibilities of Google Sheets when it comes to planning your budget. The one-hour course is effective in helping you clarify the definition and implementation of your financial goals through an organized layout.
Free personal finance course for high school students
Instilling the fundamentals of financial planning into young minds is crucial in these turbulent times. Here are some free online courses designed for young adults that are engaging and effective in helping high school students understand the concepts of personal finance.
Financial planning for young adults
This Coursera course was designed by the University of Illinois in conjunction with the Certified Financial Planner (CFP) Board of Trustees. The course, through videos and quizzes, introduces the basic concepts of financial planning to young adults. Comprised of eight modules spread over four weeks, students learn how to set financial goals, create budgets, manage credit, investment tools, savings, and risk management. The final module explores the possibilities of having a career as a financial planner and includes real-time video interactions with CFP professionals.
Savings and budgeting
This free course is brought to you by Khan Academy, another popular educational platform. During the program, students will learn how to identify their basic and long-term financial goals. They will then be asked to answer questions in order to clearly identify their priorities. Students should then design a budget using basic strategies for Financial direction.
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Naveen Athrappully is a reporter and covers world affairs and events at The Epoch Times.
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