Personal finance for young people

Introduction

Personal financial management seems more important now than ever-not just for family and consumers. In recent year, many countries all over the world identified the personal financial management education as a priority. For example, in US, 38 states now have personal finance standards built into their state education systems and 21 of these states require explicitly that the standards be implemented. One thing that is difficult for many parents is teaching personal finance to their children. This becomes even more difficult as many families are struggling with personal finances, establishing budgets, and management of money . However, teaching this valuable lesson to your children can make a difference in the world as they go to school and start making preparations for the day they enter the workforce.

Not all parents are fully qualified to teach this valuable lesson. In fact, some parents could use the experience in managing money and dealing with personal finances on your own. This makes finding an outside source to provide this education even more important because children can not learn from a positive example and there are very few chances of getting a firm foundation in money management at school. Life does not come with a regulation and most of us are not taught about proper money management, budgeting and personal finance from our parents. In fact, our parents were a generation in which these things were not discussed. It is logical that many of us still we stumble our way through the dense forests of money management.

Personal finance and the importance of this term

According to "Taking Ownership of the Future" published by the Department of the Treasury, Financial literacy is the ability to understand finance. More specifically, it refers to an individual's ability to make informed judgments and effective decisions about the use and management of their money. Raising interest in personal finance is now a focus of state-run programs in countries including Australia, Japan, the United States and the UK. An international OECD study was published in late 2005 analyzed financial literacy surveys in OECD countries.

Generally speaking, the above result suggests that few financial education programs have been found to be reasonably effective. Research in the US shows that workers increase their participation in 401(k) plans (a type of retirement plan, with special tax advantages, which allows employees to save and invest for their own retirement) when employers offer financial education programs, whether in the form of brochures or seminars. Financial Literacy is important, no matter what age group individual belong to, whether that person are just starting 5th grade, funding personal college education, planning for a family or retiring. Financial Literacy will help people achieve their goals whether they are to own their own business, raise a family, or to retire to a desert island.

One of the great problems of our society and the possible cause of many mistakes made ??in recent years in finance is the lack of teaching of basic economic principles to young ...