Expert Perspectives on Why Financial Literacy Is Important
For better or worse, money touches all areas of life. Financial literacy is important.
Why is financial literacy important?
Financial literacy is important because it equips us with the knowledge and skills we need to manage money effectively. Without it, our financial decisions and the actions we take—or don’t take—lack a solid foundation for success. And this can have dire consequences.
To explore the importance of financial literacy, we turned to personal finance experts working in colleges, high schools, and credit unions. Together, the populations they serve span a broad range of ages, incomes, and backgrounds. These educators witness first-hand the impact that financial literacy—or the lack of financial literacy—can have on a person’s life.
We posed the same question to each of them: “Why is financial literacy important?” Here’s what they had to say.
Expert perspectives on why financial literacy is important
“For college students, financial literacy is important because the formula for college success today only has two factors: grades and money. Professors and instructors thoroughly educate students on academic requirements and grading policies. It’s often new financial responsibilities and realities that campuses are not adequately educating or preparing students for success. Research has even shown that students are more likely to drop out of school because of “outside pressures” than poor grades. Student success is no longer constrained to classrooms or defined by academic performance alone. The future success of our students relies on providing opportunities for them to learn, develop, and strengthen core life skills they need today and more importantly tomorrow as successful graduates. Our team is proud to be creating a new paradigm within higher education by bringing the topic of money out of the shadows. We have become national leaders in our field by confirming that personal financial education services are no longer an exception for today’s students—they are an expectation.”
Paul Goebel, Director, Student Money Management Center at the University of North Texas
Why is financial literacy important?
“Finances inherently—whether or not it’s incredibly short-term in just buying lunch for that day or long-term saving for retirement—help you accomplish whatever your goals are. And financial literacy is important because if you learn about it, it’s going to teach you how to be efficient with your finances in such a way that you can accomplish more goals, and the goals that you do have, faster.
By learning the process and learning what you can do to better organize your life through financial literacy, you can accomplish things a heck of a lot faster and more efficiently.”
Phil Schuman, Director, MoneySmarts Program at Indiana University
Why is financial literacy important?
“Financial literacy is important because it’s pretty much one of the things that will encompass just about every aspect of a person’s life. So even in families, even in marriages, lots of the hard times that people will have are going to revolve around money. In the system that we live in, everything revolves around money. We’re in a capitalist society, so it’s to everybody’s benefit to know as much as they can about being wise about their money so that they can at least give themselves some type of stability in the future.”
Dameion Lovett, Campus Director and Overseer, Financial Education Program at the University of South Florida
Why is financial literacy important?
“Financial literacy is important because it allows an individual to understand and maximize whatever level of income they earn. It helps people transform their lives. That’s why we do it, and that’s why it’s important.”
Latoya Goree, Director, Office of Financial Literacy at UMKC
Possessing financial literacy is VITAL:
Financial literacy helps you plan for the future.
Financial literacy helps you meet your financial goals.
Financial literacy helps you get the most out of your income.
Financial literacy helps you go from ‘surviving’ to ‘thriving.’
Financial literacy can improve many areas of life — relationships, careers, hobbies, and home life.
Financial literacy provides life skills for young and adults to use.
Word from the Editor:
Financial literacy allows you to beat the banks in an uncertain economy, create residual income when you possess the skills and give you the financial freedom that a 9 to 5 job cannot give you. (J.O.B. = Just Over Broke).
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To your success!