How does financial education change your life?

In our day to day, we constantly make economic decisions. Spend, save, invest… What is the right choice? Are you managing your money well?

Suddenly, financial education becomes an essential tool in our lives. And it is that, a good financial education allows us to take advantage of key opportunities in our lives and helps us make the right decisions.

Despite the fact that disciplines such as Economics are gaining weight in educational programs, there is still a long way to go in the field of financial education.

Every day poses challenges to our personal finances: request a mortgage, invest in the stock market, save or protect yourself against possible scams. This is where financial education can be a compass and even a lifeline.

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Therefore, it is important to acquire a financial culture from an early age. This knowledge will help us to face economic decisions, to protect ourselves from risks and to better manage our personal finances.

The importance of a good starting point

From childhood, it is important to arouse curiosity in the little ones about how to get money, how to manage it and what are the consequences of making certain decisions.

In this sense, the little ones must know how to manage their payments and tips. In this way, they will learn the first notions about what spending and saving mean.

Managing your money correctly also implies being a responsible consumer. For this reason, the little ones will begin to understand what consumerism means and a world loaded with advertising that does not stop generating needs in consumers.

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This consumerism and a small budget to manage lead young people to ask themselves what their true needs are, how far they can spend and when is the time to save.

What notions and concepts does financial education bring to everyday life?

Throughout our lives, we will be forced to manage a budget, trying to find a balance between the expenses that we need to satisfy our needs and between the savings that we will require for possible emergencies or important investments.

For this, planning will be necessary, taking into account the period of time and realistic personal objectives in accordance with our level of income.

Likewise, financial education not only helps us plan our lives, but also allows us to calculate the interest that the bank will give us or helps us anticipate the taxes that we will have to deduct from our payroll.

On the other hand, financial education implies an essential reflection before choosing. This means assessing investment alternatives, informing ourselves conscientiously and asking ourselves the appropriate questions before hiring a pension plan or entering an investment fund.

In other words, financial education is ubiquitous, since it affects us in all aspects of life. It helps us to be able to enjoy our economic resources in the present, while thinking about the needs of tomorrow, thinking about saving for a future retirement.

What are the benefits of financial education?

By being aware of our income and expenses, financial education allows us to organize our lives and helps us set realistic goals. All of this translates into more efficient management of family assets and, therefore, greater family, social and economic well-being.

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Saving is a key element of financial education. Thus, with a reasonable vision of the balance between spending and saving, it is possible to satisfy present consumption without compromising the future. Thanks to this efficient saving, there is a margin of safety for years to come.

Another quite common problem in the current context is scams, especially in the complex world of the Internet. Well, a good financial culture helps us discern an honest offer from a fraud. Those with financial knowledge are able to discern deception from opportunity.

Beyond scams, a key concept in economics is efficiency. Thus, we could see the economy as the sum of numerous decisions made by individuals. This means that, if we have responsible and thoughtful consumers, we will have a much more efficient economy globally. This assumes that a society of efficient consumers brings with it general welfare.

It is clear that investors with a financial culture are efficient investors, resulting in more efficient markets. This way of acting brings with it, not only greater confidence at the individual level, but also a generalized confidence in the economy.

We must not forget a big question: Is it good to get into debt? When and to what extent can I borrow? Once again, financial education will once again play a determining role. Thanks to it, we will be able to calculate the interest on the mortgage, our ability to meet our debts and what our debt limit will be.

How can I improve my financial culture so that it improves my life?

The most direct and common way to improve your financial knowledge is to go to traditional institutions. In other words, you can study Economics and Business Administration at colleges and universities or enroll in courses. You can also access the Economipedia Campus and start learning now from great experts in each subject.

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At Economipedia, we have devoted ourselves to democratizing financial education, not only providing a great economic dictionary, but also analyzing economic news and making it available to everyone. As part of this great effort, we also offer courses that will help you learn the fundamentals of the economy and that will help you make key decisions when making your investments.

An extraordinary source of knowledge are books. Economists and investors collect their experiences in magnificent works. Their experience can point you the way, or at least help you ask the right questions.

Reading is a great way to acquire knowledge and not only through books. Being aware of current economic events helps us understand the context in which we find ourselves. Hence, the economic press, blogs and specialized economic websites are a highly valuable tool. In their analyses, economists break down the economic keys, propose investment strategies, alert us to possible scams, and help us build an overall picture of finances.

Not negligible are the unconventional information media. We are talking about podcasts, YouTube channels and social networks. It is a direct, dynamic and close approach to economics and finance.

Do not forget that the good performance of the world economy necessarily requires a good financial education. Therefore, it is necessary to take into account what it means to manage a personal budget. Remember that if, as a society, we manage our personal finances efficiently, we will achieve well-being and economic prosperity worldwide.

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