Knowledge of financial concepts along with the skills to use them is the cornerstone to making sound decisions, which are directly linked to the long-term financial well-being of citizens, and this knowledge makes consumers less vulnerable to being exploited or deceived. However, since the rapid financial digitalization, there is a pressing need to protect young people and vulnerable groups from being prime targets for financial fraud as well as there can be serious negative externalities from ill-formed financial decisions, affecting not only the students themselves, but also their families and the broader well-being of the economy.
Students especially those preparing for their undergraduate research projects need a lot of financial literacy programme so as to enable them have money for sourcing for materials and transportation to their case study location. young people are the future of a nation and sound decisions on financial matters will have positive externalities to wealth creation during the course of their lives, thereby enabling them to fulfill long-term goals such as attaining higher education, climbing up the property ladder and contributing towards their pension financing.
Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. It is also the ability of an individual to obtain, understand, and evaluate information relevant to make decisions with awareness of the likely financial consequences.
Financial literacy is the understanding of financial facts, concepts, principles, and technological tools that are the key to make financial decisions. It is the ability to understand how money works, how someone makes, manages and invests it, and also expends it (especially when one donates to charity) to help others.
Financial literacy can also be defined as the ability to make informed judgments and to take effective decisions regarding the use and management of money. In today's world of increasingly complex financial decisions, financial literacy may be considered a vital skill for all consumers.
IMPORTANCE OF FINANCIAL LITERACY TO FINAL YEAR STUDENTS
The importance of financial literacy to final year students cannot be overemphasized both to their personal lives and their dealings with the society at large. However, we are living in an age of unprecedented debt and students are destined to face challenging times financially. It is therefore, imperative that educators begin to equip students with the knowledge and skills to succeed as consumers in today’s global economy. Financial literacy is very important as it equips people with requisite information and ideals needed to make sound decisions with accuracy to manage financial resources and to improve financial capability to call for better financial services. Below are some under listed importance of financial literacy.
A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.
Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.
It is therefore, very important that students have a financial plan on how to spend their money to avoid impromptu and unnecessary spending. It will help them to plan, organize, track, and improve their financial situation. In other words, from controlling the way you spend to consistently saving and investing a portion of your income, a budget helps you stay on course in pursuit of your long-term financial goals.
B) PERSONAL FINANCIAL MANAGEMENT
Personal finance is a term that covers managing your money as well as saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning.
Personal financial management is very important as it helps you understand how much money you'll need for tax payments, other monthly expenditures, and savings. Personal financial management helps us to manage the finance of our home which includes budgeting, saving, investing, debt management and other aspects related to personal money where by an individual can achieve personal goals.
Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. You can invest in endeavors, such as using money to start a business, or in assets, such as purchasing real estate in hopes of reselling it later at a higher price.
An investment is also an asset or item acquired with the goal of generating income or appreciation. For example, an investor may purchase a monetary asset now with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. That is why students need financial literacy which is the achievement of skills necessary to make informed and effective decisions regarding earning, spending, and the management of money.
When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth. An investment always concerns the outlay of some asset today time, money, or effort in hopes of a greater payoff in the future than what was originally put in.
In general, any action that is taken in the hopes of raising future revenue can also be considered an investment.
Financial literacy is more important than ever in today’s world. Being aware of money management, income, saving, and spending can equip our young people with knowledge to fight fraud and take charge of their finances.
Financial literacy which encompasses a set of guidelines and clarifications on appropriated attitudes in the planning and use of personal financial resources as well as the ability to make informed judgments and make effective decisions related to financial management. It is important and very relevant in our day to day lives.
Therefore, it can be conclusively said that financial literacy is the “gun” required, to enable decision-making financially aware and beneficial to the economic and financial well-being of individuals, families, and society in General.
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