Studies have shown that an overwhelming majority of Americans have no clue how to manage their money, which can lead to financial problems in the future. The good news is that there are things you can do right now to help yourself get ahead financially. Financial literacy is an incredibly important skill to have, but it’s not something you’re taught in school or at home unless your parents and teachers are way ahead of the curve.
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Millennials are in Debt
A study from the Ohio State University found that millennials are carrying more debt than any other generation. One reason is that they spent too much of their income on non-essentials and put off saving, but another reason is that they had to take out loans to afford college. The average student loan debt in 2018 was 37,172. That’s a lot of money. And it doesn’t stop there. Student loans typically have interest rates higher than what you’ll find with traditional credit cards or mortgages, which can mean a longer repayment period and even more interest added onto the balance owed. So what does this mean for students? First, it means not taking out an unnecessary loan if you don’t need it.Financial Literacy
Millennials are Harshly Judged by Job Prospects
Millennials are a generation of people born during the 1980s-2000s who have been harshly judged by their job prospects. They are often stereotyped as lazy, entitled and unambitious by employers. These unfair judgments stem from a variety of sources, including the widening skills gap. The gap is created when there is more demand for jobs than qualified candidates to fill them. In turn, many millennials have had to take lower-paying positions to find employment.
Though this doesn’t mean that all millennials are undereducated or undeserving of better opportunities; it simply means that they haven’t found the opportunity that suits them yet. Some even go so far as not being able to find work at all due to their qualifications being outdated in an ever-changing world economy. Luckily, we live in the digital age where knowledge can be acquired on one’s own time. There are various programs such as MOOCs (Massive Open Online Courses) that offer courses like The Art of Investing through top universities such as Stanford University and Harvard University which provide potential investors with valuable information on how to best grow their money.
The Importance of Money Management Skills
Learning how to manage money is a crucial life skill, and it starts at a young age. Kids can learn how to save and spend their money by practicing with real money or by playing games that teach them about the value of different coins and bills. They can also learn about the importance of budgeting, investing, credit cards and loans, insurance policies, taxes, and other aspects of financial literacy. The earlier kids start learning these skills, the more likely they are to be successful with their finances in the future. Here are some great ideas for teaching your children important money-management skills while they’re still young:
1) Have children work a job.
2) Teach kids how to count change.
3) Let them make mistakes when paying with cash so that you don’t have to waste your time doing this every time you go shopping together.
4) Use play money when buying groceries as an opportunity to teach children what different denominations mean and what prices look like.
Money as Motivation
Money is a powerful motivator and can help keep students engaged in their education. Some ways to use money as a motivator include awarding prizes or paying students based on the number of hours they spend studying or completing homework assignments. Parents, teachers, and school administrators should work together to develop a system that will motivate students to succeed academically.
For instance, parents could provide children with rewards such as extra time watching television if they get good grades. Teachers could create tasks such as reading out loud and have kids give out tokens to those who finish early. School administrators might offer incentives like cash or gift cards to the first 100 kids who complete their homework assignments successfully each night. They may also reward specific behaviors such as getting an A on an exam with two free tickets to see a basketball game at the local college gymnasium. These types of rewards help encourage students to take responsibility for their success and be more responsible for achieving academic goals.
Managing Your Student Loans
Paying back your student loans can be a huge Financial Literacy burden, but it doesn’t have to be. One of the best ways to pay back your loans is through the federal income-based repayment plan (IBR), which bases your monthly payments on how much you make and if you have any dependents.
IBR has caps on what percentage of your income goes towards paying off your debt each month, so this is an excellent option if you’re struggling with how to manage student loans while still making ends meet. You may also want to consider consolidating your student loans into one lower interest rate loan, as well as find out more about public service loan forgiveness programs. For many people, multiple options allow them to easily handle their student loan payments.