Benefits Of Financial Literacy

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Based on the study from University of Toronto, this list of benefits can help a lot to know what the do’s and don’ts are about financial literacy. It tells us to: Save money! Free up resources to do what you want. Be able to navigate, evaluate, and select from the hundreds of (confusing) investing, savings, credit, and consumer spending options that exist. Manage or avoid debt. Increased costs for education and housing mean larger debt loads for many individuals. Empower you to take charge of your retirement. Defined benefit plans (aka the traditional pension) are being replaced by defined contribution plans. This change has shifted responsibility for retirement and investment planning away from employers onto employees. This is particularly…show more content…
“What if when young people started their first job, they already [knew to] put money into their retirement account?” Economics and Accountancy professor Annamaria Lusardi told U.S. News & World Report. “If young people could do this at age 20 rather than age 50, it would make an enormous difference.” These skills can be integrated into existing lessons, such as by teaching about the financial implications of the Great Depression in history class.
According to Canada Business Network, they have good news that can benefit from a workplace relating to financial literacy. The good news is there is a simple way to address financial stress that will benefit both employees and their employers: financial literacy. Offering financial education in the workplace ensures that employees have access to information when it is relevant to them. And by improving their knowledge, skills and confidence around money, employees will be better able to manage debt, save for emergencies and plan for their
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“A great deal of variation continues to exist in how researchers define and measure financial literacy itself.” (Hung, Parker, and Yoong, 2009). According to Kamakia, (2017), “Different definitions of financial literacy show that, researchers are yet to agree on a common definition and measurement of this concept.” “There currently are no standardized instruments to measure financial literacy.” (Huston, 2009).
Remund (2010) states that financial literacy is the “measure of the degree to which one understands key financial concepts and possesses the ability and confidence to manage personal finances through appropriate, short-term decision-making and sound, long-range financial planning, while mindful of life events and changing economic conditions.” OECD (2013) states that financial literacy is the “knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial wellbeing of individuals and society, and to enable participation in economic
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