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    The Impact of Achieving Financial Literacy

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    Aldrin Infante
    The document discusses the impact of achieving financial literacy. It states that lacking financial knowledge can lead to poor financial decisions and challenges for students, professionals, and self-employed individuals. Achieving financial literacy can improve money management skills and facilitate things like savings. It also discusses how factors like age, employment, education, and family background influence individuals' financial behaviors and decision-making. The document concludes that gaining financial literacy can empower individuals and improve their quality of life by helping them make better financial decisions.

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    The Impact of Achieving Financial Literacy

    Uploaded by

    Aldrin Infante
    198 views3 pages
    The document discusses the impact of achieving financial literacy. It states that lacking financial knowledge can lead to poor financial decisions and challenges for students, professionals, and self-employed individuals. Achieving financial literacy can improve money management skills and facilitate things like savings. It also discusses how factors like age, employment, education, and family background influence individuals' financial behaviors and decision-making. The document concludes that gaining financial literacy can empower individuals and improve their quality of life by helping them make better financial decisions.

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    Academic writing of achieving financial literacy

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    The impact of achieving financial Literacy

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    The document discusses the impact of achieving financial literacy. It states that lacking financial knowledge can lead to poor financial decisions and challenges for students, professionals, and self-employed individuals. Achieving financial literacy can improve money management skills and facilitate things like savings. It also discusses how factors like age, employment, education, and family background influence individuals' financial behaviors and decision-making. The document concludes that gaining financial literacy can empower individuals and improve their quality of life by helping them make better financial decisions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    198 views3 pages

    The Impact of Achieving Financial Literacy

    Uploaded by

    Aldrin Infante
    The document discusses the impact of achieving financial literacy. It states that lacking financial knowledge can lead to poor financial decisions and challenges for students, professionals, and self-employed individuals. Achieving financial literacy can improve money management skills and facilitate things like savings. It also discusses how factors like age, employment, education, and family background influence individuals' financial behaviors and decision-making. The document concludes that gaining financial literacy can empower individuals and improve their quality of life by helping them make better financial decisions.

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    The Impact of Achieving Financial Literacy

    In today’s generation, individual encounters different challenges when it comes to


    finances. Be it as a student, professionals or self-employed individuals. Challenges like shortage
    of money, financial problems, budgeting, and addressing expenses. In regards with this matter, it
    greatly affects the society and the community where students, professionals and self-employed
    individuals lack basic knowledge and skills and the ability to deal with money which results to
    poor financial decisions. The lack of financial sophistication is a widely pointed reason for many
    financial mistakes made by individuals (Mak & Braspenning, 2012). Knowing the value of
    money plays a vital role in improving finances and achieving financial literacy will bring a great
    impact not only to themselves but also for their long-term plans in life.

    To further improve finances, distinguishing different financial behaviors and problems


    among students, professionals and self-employed individuals is a must. In here, an individual
    could track on where he/she experiences shortcoming when it comes to finances. In the study of
    Bauer, Braun & Olson (2000), showed that several studies in the past have tried to investigate the
    impact of financial literacy on financial behavior. Financial literacy has proved to facilitate
    student’s involvement in savings, investment, freeing themselves from debt, effective money
    management through living on a budget. Different financial behaviors and problems among
    students, professionals and self-employed individuals include: Reckless spending on money, no
    saving habits, no tracking of expenses, no visualization of long-term plans in life and more.
    Knapp (1991) suggests that increasing financial literacy can be effective strategy in improving
    quality of life which ultimately leads to better decision making resulting with effective utilization
    of resources to improve their standard of living.

    There are three factors affecting financial behaviors and problem among individuals
    namely: age, employment/education, family background and knowledge about financial literacy.
    These factors greatly affect the financial decision of individuals which may lead them to
    financially challenged. In addition to that, when it comes to employment and education, the
    expenses rise. For instance, if a person is employed basically, he/she have the money to spend on
    something. The tendency of having money can lead to spending too much with the fact that
    having money to spend. Unfortunately, then that person will be having a bad decision making in
    terms of how to spend his/her money. As we go in education, same thing will happen if a person
    is being taught and practiced how to use and spend money efficiently, then most likely that
    person knows how to handle money. Like for example, spending money on just important things
    and weighing things equally.

    Lastly, in terms of family background, it contributes a lot in shaping a person’s behavior


    and attitude. It is in the family where all teachings and values are being practiced. If a certain
    family doesn’t teach their children in handling finances, therefore, they will experience
    challenges in handling finances. Lastly, having knowledge about financial literacy will make an
    individual financially literate. Thi et al. (2015) states that financial knowledge has a positive
    relationship to financial management behavior due to the role of education with the existence of
    seminars that more and more about financial knowledge will improve one's insight into financial
    management behavior. However, besides the external influences of politic, demographic and
    economic forces, Robb & Woodyar (2011) point out that the individuals’ financial well-being is
    dependent on their actions.

    Previous studies highlight benefits of having financial literacy. According to Knapp


    (1991), increasing financial literacy is a way to increase empowerment and improve the quality
    of life. Energy, thought, and time are spent pursuing money and limiting the unnecessary waste
    of money. Thus, when students gain more knowledge and more positive attitudes toward money,
    he/she make better decision, which save resources and improve his/her situation (Knapp, 1991)

    Achieving financial literacy among students, professionals and self-employed individuals


    will have a great impact in making financial decisions. It mitigates the effects of an individuals’
    financial challenges at home, school, workplace and around the society. Achieving financial
    literacy is a lifelong process that's what it makes it essential for an individual to apply learnings
    about it as it is going to mold them on how to be efficient with their finances. Also, it is the best
    vehicle in accomplishing more goals, equipping the knowledge and skills in performing effective
    financial decisions, becoming a successful and better individual and reaching financial stability
    in life. Furthermore, Hibbert & Beutler (2001) added to this argument that lack of financial
    knowledge has often leads to face financial difficulties in individuals’ lives. Achieving financial
    literacy is not just an asset to yourself, but a big investment to reach and improve quality of life.

    References

    C.A, Robb and Woodyar A., “Financial knowledge and best practice behavior” Journal of
    Financial Counseling and Planning, vol. 22, no. 1, pp. 60-70. 2011

    J.P Knapp, “The benefits of consumer education: A survey report” Michigan Consumer
    Eduaction, 1991.

    J.R Hibbert and I.F Beutler, “The effects of financial behaviors on the quality of family life:
    Evidence from adolescent perceptions”, 2001.

    J.W. Bauer, B. Braun and P.D Olson, “Welfare to Well-being Framework for Research,
    Education and outreach”, The journal of consumer affairs, 2000.

    Knapp, J. P. (1991). ​The benefits of consumer education: A survey report [​ Brochure].

    Michigan Consumer Education Center.

    S.J Huston, “Measuring financial literacy” 2010

    Thi, N., Mien, N., and Thao, T.P. . “Factors Affecting Personal Financial Management
    Behaviors: Evidence from Vietnam Economic, Finance and Social Sciences” 2015.

    V. Mak and J. Braspenning, “Errare humanum est: Financial literacy in European consumer
    credit law” Journal of consumer policy, vol. 35. Pp. 307-332. 2012

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