Regardless of the upheavals brought about by the Coronavirus, profound changes were already taking place in our society. Some examples? The increase in life expectancy and Economics Tuition, Financial Education, the decrease in the birth rate. The reduction of pensions, the changeability of the financial markets, and just to name a few. All these changes have had, and still have, repercussions on the decisions that each person makes throughout his life. Especially with regard to savings, insurance, investment, and pension plans. A higher life expectancy determines different planning for the future and the needs that will emerge. The changing labor market opening up to young people will imply different choices; more complex markets, and with a richer product offer, will affect the choices of citizens.
One thing all these changes have in common:
They will be lasting. This is why it is increasingly necessary, both for young people and for adults, to have a good financial education.
But what exactly is it about? We talk about it in this article!
– What is financial education
– The things you absolutely must know to further your financial education
– Financial education: the situation in Singapore
If you found this article interesting and you are interested in the subject, we recommend that you subscribe to the MoltodiPiù Newsletter! Each month you will receive free in-depth content related to the world of work, with a focus on the insurance sector.
What is financial education?
If you want to understand what financial education is, first you can go back to the definition given by the OECD, the Organization for Economic Co-operation and Development:
“Financial education involves learning by consumers, savers, and investors how to improve their understanding of financial products. And the concepts behind them and, through the study, gathering of information and advice from the most experts. How to develop aptitudes and knowledge suitable for understanding the risks and opportunities for making financial choices. To ensure economic well-being and improve one’s level of security in the future “.
Therefore, financial literacy is a set of awareness, knowledge, skills, and attitude, useful for achieving financial well-being. It is an ongoing study that people carry out throughout their life.
It should not be thought that financial education is a difficult and impossible discipline for most to understand:
In reality, there are various ways to start feeding one’s own, and many initiatives are already taking place, even in schools. What should be disseminated is a healthy understanding of how to make sustainable economics tuition choices.
Furthermore, it must be considered that citizens are increasingly called upon to vote on complex economics tuition reforms: it is essential that they know how to distinguish between reliable information and one without foundation. Knowing what financial education leads to a conscious exercise of one’s economics tuition citizenship and avoids falling into the clutches of someone who takes advantage of their scarce knowledge.
The things you absolutely need to know to further your financial education.
A few notions may be enough to cope with the decisions related to money that you have in everyday life, to those that must be taken to plan your future and to support emergencies and unforeseen events.
Let’s see together the things that it is essential to know to encourage one’s financial education, also promoted by the Bank of Singapore.
1. Have Some Knowledge of Mathematics
Simple Interest Rate, Compound Interest Rate, and Inflation: To calculate some of the basic values for having a financial education, you need to be familiar with numbers. An area in which we must improve as a country, especially starting from school, given that Italian students do not shine in this matter.
2. Keep A Balance of Income and Expenses
Knowing how much you have available and how many expenses you make is really essential. Such attention allows you to understand if you are making unnecessary purchases and if you are covered in case of unpleasant unforeseen events.
3. Save Money If Possible
Knowing how to save is not easy: to do so, a good tip is to spend less than you could. Even if you get a raise or an unexpected income, you need to understand what unnecessary expenses are to be avoided and plan what you want to make.
4. Know How Much to Get Into Debt, Without Exceeding
Using borrowed money is necessary at certain times in one’s life. For example, when buying a house or when children start an expensive education. But what must be avoided is getting into debt beyond our possibilities of repaying the requested loan.
5. Know Your Needs and Evaluate the Types of Services You Need
Having a financial education also involves understanding your needs. Simply, you have to identify the financial, insurance, and pension products that are right for you and that have a lower cost, to choose the best one offered on the market.
6. Learn to Understand the Traps
Making decisions involves setting aside one option and choosing another. If the evaluation is wrong, it will only be discovered later. Being financially literate also means recognizing the “traps ” we can fall into, guided by our instincts.
7. Ask for The Help of an Expert
Being able to do it all on your own would be ideal, but unfortunately, this cannot be the case in every field. The risk of making a mistake, especially when it comes to money and investments, is real and also dangerous. Financial experts, such as financial advisors, can provide us with the help we need, being the foremost connoisseurs of financial literacy.
Financial Education: Situation in Singapore
Numerous studies have testified that Italians are not very literate in financial and economics tuition matters. The research shows not only that the population of our country does not know the basic concepts of these subjects. But also has a poor aptitude for planning the management of their resources through a budget, and a low diffusion of financial products. In particular, the most “lacking” groups are the young and the elderly.
As we said before, in case you do not consider yourself suitable to acquire a financial education despite its benefits are clear, there are figures who can help us precisely because they specialize in these subjects: they are financial consultants.
Having a financial education in fact does not mean becoming an investor and taking risks:
It means understanding what your needs are and understanding if it is necessary to rely on a professional in the field. In short, having a financial education helps to face every decision-making process and to go down the right path. Here in Alliance Insurance, Our insurance advisors follow a special course that prepares them to take the exam to become financial advisors.