The Importance Of Financial Education

Abstract

Introduction

According to the national educational standards, usually students have to memorise facts and statistics rather than making an analysis and evaluation of the ideas mentioned in the classroom. Thus, it is not difficult to realize that most of the knowledge that is gained at school ages is not useful in the future. The vast majority of the theorems and formulas become forgotten after several years, and their applications in the real life are unknown both for adults and students. We have better cars, cellphones, houses and movies, etc. Whenever you look things are getting better, but not in education. It is important to highlight the evidence that people suffer personal economic collapse because of the lack of financial literacy

(2010), lack of financial literacy was one of the main causes of the financial disturbance. Crisis, with which people are suffering now, is not financial. In fact, it is a crisis of the education. It begins, when the kids go to the first class, and then for years - sometimes for decades - do not get absolutely no useful knowledge about money - only the information from those, who do not know how to use

It is important to be financially literate before making any crucial decisions regarding finances, in order to deal with the issues in a proper manner. Thus, it can be stated that financial education in high school system should be improved to a higher efficiency. However, it should be considered that by the age of 15 to 18 adolescents are already formulated in their cultural and social lives. In other words, they have substantial variances, and “one-size-fits-all” programs are probably going to be insufficient for them. Some of them could be well in maths, while the majority is struggling with counting and so on (Lusardi et al. 2010, 23). Money flow controlling should be taught by school teachers, not parents. First of all, financial knowledge that is gained from parents or via the interaction with others can be not only beneficial, but also disadvantageous for the young learner. For instance, according to the results of the scientific research conducted by the Center for Financial Studies on the topic of financial literacy amongst young, respondents whose parents and close friends have no college degree in finances were 16 percentage points less likely to be aware of risk diversification, which is very crucial for saving and investment decisions (Lusardi et al. 2010, 22). Thus, doubting regards to those in whom sufficient financial knowledge is absent, as trusting them