People need to learn money management skills before they manage their own money. Why is financial education important for youth? Because it is so easy for financially illiterate young adults to fall into financial traps without even knowing it. Bad decisions about personal finance can take decades to fix. When youth get a quality financial education in how to manage their personal finances before they need these skills, they will be prepared when the time comes. Financially literate young adults stand a far greater chance of leading an abundant life of security from the start. Financial education is important for youth because it provides a powerful head-start in life.
When confronted with the question, “Why is financial education important for youth”, one should reference empirical studies that show marked improvement in financial behavior after undergoing a financial education program. Although the diploma that high school students receive is a symbol of the knowledge they have gathered, it represents nothing about their knowledge in financial literacy, a basic proficiency which is needed to prosper financially. If you’re asking yourself, “Why is financial education important for youth”, looking at the impact financial education has on peoples’ lives will provide a clear answer.
Attending an employer-sponsored retirement seminar saw net worth increase by nearly 27% for those who were in the lowest income bracket and had not received a high school diploma. (Dartmouth). http://www.dartmouth.edu/~alusardi/Papers/Financial_Education_2004.pdf
Researchers asked individuals two sets of questions, one pertaining to basic financial literacy while the other related to advanced financial knowledge. The researchers then applied statistical techniques to construct indexes of financial knowledge. The probability of participating in the stock market increased 14 percentage points with a one standard deviation increase in advanced financial knowledge. In addition, a one standard deviation increase in basic financial literacy increases the probability of saving for retirement by 20 percentage points (De Nederlandsche Bank). https://www.dnb.nl/en/binaries/working%20paper%20313_tcm47-257145.pdf
A statistically significant association was determined between negative financial habits, such as gambling among Australian youth, and the influence of peers and parents (Science Direct). https://www.sciencedirect.com/science/article/pii/S0140197103000137?via%3Dihub
In a survey by OECD, well over a quarter of respondents replied that their culture influenced their attitudes toward wealth (Organization for Economic Cooperation and Development). https://www.oecd.org/finance/financial-education/2017%20Seminar%20on%20financial%20education%20