The importance of financial education in the life of citizens

Do you know what it is? importance of financial education in the life of a citizen? Some people believe that financial education serves to make people rich. 

In fact, that is not the role of this concept. Its main purpose is to teach us how to manage our money. 

As a result, we have healthy financial habits, learn to value money and have a balanced financial life. 

In today's text we will discuss in more depth the importance of financial education in the a person's life. In addition, we will mention some tips that you can put into practice today and see your finances change for the better.

Don't miss out! 

How important is financial education in a citizen's life?

Financial education is an important factor for different reasons and needs to be included in people's lives from early childhood. 

A survey carried out by Serasa Consumidor and Serasa Experian showed that one in three students said they learned the importance of saving money after participating in financial education programs. 

When we start learning about this subject, a wide range of possibilities opens up. It is common to even think things like: I wish I had learned this when I was young.

To understand better the importance of financial education in the life of citizenso, check out the main advantages of this practice below. 

1. Conscious consumption

Brazil is facing the highest default rate in the last 12 years. Almost 801,000 Brazilian households are in debt, according to the Consumer Debt and Default Survey. 

Certainly, the main cause of this debt is high inflation and the decrease in families' purchasing power.

This ends up causing these families to resort to other alternatives to increase their purchasing power, for example, credit cards. 

The uncontrolled and unplanned use of this product ends up causing many families to go into debt. 

With financial education, people tend to consume more responsibly and always make the best choices.

This way, they avoid unnecessary expenses and over-indebtedness. 

2. Financial balance

Having financial balance means maintaining a stable financial life; away from debt and with your finances breathing. 

3. Smart choices

Adopting good financial habits does not mean depriving yourself of everything. In fact, with financial education you will learn to make smart changes and improve the quality of your consumption. 

With this concept, you will learn to use your money wisely, but without losing quality.

It is closely linked to the consumption experience. You will have the habit of reflecting on your consumption; the experiences and benefits it will bring to your well-being and also to your finances. 

Learning to invest money in what really matters through rational and responsible consumption is one of the reasons for importance of financial education in the life of the citizen. 

4. Learn about the value of money

They say that easy money comes, easy money goes. But have you ever noticed how hard you work to earn your salary and at the beginning of the month it disappears faster than the flash? 

With financial education you learn to value every penny that comes in, because you also learn to value your efforts and the hard work it takes to get your money.

One of the main ways to learn how to value your money is by carrying out financial planning. 

In it, you plan each expense and think very carefully before making any purchase, no matter how simple it may be.

Furthermore, you don't spend more than you earn and you also learn to save. 

5. Understand the importance of investing

Everyone has material dreams, for example, buying a house, a car, attending a good college, having plastic surgery. 

The best way to achieve your goals and objectives is by investing your money; investments are directly linked to your goals. 

By investing, you use your savings wisely to achieve your financial goals. In addition, you can:

• Create a financial reserve;
• Build a heritage;
• Protect yourself from inflation;
• Become financially independent.

Here on our blog you will find a lot of content that can help you enter the world of investments. Don't miss it!  

Now that you've discovered a little about the importance of financial education in the life of citizens, Check out some tips that will help you become financially educated. 

Put it into practice today and see your finances change for the better!

After all, what is financial education?

In short, financial education is a transdisciplinary area where the main objective is to help people with their finances. 

In this field, you learn how to choose the best income, conscious consumption, how to relate to money, etc.

It is an efficient tool for changing individuals’ behavior and thinking regarding financial concepts and products.

With the necessary information, guidance, training and encouragement, they end up becoming more aware of the opportunities and risks involved in any type of financial operation. 

What to do to have financial education?

To get started, you don't need much. Just determination and discipline are enough to make small changes and adopt healthier eating habits. 

Check out some steps below to start getting financial education today! 

1. Have an income

If you don't have an income yet, the first step is to get one. If you already have an income, but it's not enough to help you achieve financial stability, the advice is to increase that income. 

There are different ways to do this, for example, by earning extra income. There are currently many ways to make money online. 

Read our text and see how to make money on the internet. 

Another way is to move to a higher paying job, however, you need to update your resume and invest more in your career.

The job market is very competitive, therefore, to earn more, you need to stand out from the rest and offer more.

Extracurricular courses, MBAs, specializations, postgraduate studies and an updated portfolio are just some of the ways to invest in your career to earn a better income.

2. Spend less than you earn

Until you have any leeway in your income compared to your expenses, it will be difficult to continue with the main steps of financial education. 

When you stop spending more than you earn, you will have money left over to invest in a better quality of life for your family, invest, save, save for emergencies or even earn extra income.

Therefore, if your salary is already compromised before you receive it, you need to change this situation urgently. 

3. Avoid consumerism

Unconscious consumerism is one of the main financial villains of thousands of Brazilian families. 

One of the main objectives of financial education is to help you fight this villain!

Don't worry! You will continue to be a consumer, after all, this is part of everyone's life.

However, you must combat unbridled consumption. Start studying and planning your expenses. 

Cut items from your list that are not so important. To help you, you can ask yourself some questions before buying a product or service, such as:

• Can I afford to pay without compromising my budget?
• Can I survive without this purchase?
• Isn't there a more cost-effective alternative?
• Can I use the money from this purchase for something more important?

Start training your brain, over time things will happen automatically.

You will no longer be tempted to buy unnecessary items, and you will pay more attention to the essential items on your list. 

4. Financial planning and the importance of financial education in the life of citizens

It is impossible to talk about financial education and not highlight the importance of financial planning. 

With this tool, you can identify deficiencies in your budget, thieves in your salon, unnecessary expenses and thus know where to make changes to see your finances breathe. 

The basis of your financial planning is your salary. Your essential expenses should not exceed your income. 

In addition, you should have money left over for unexpected expenses. Don't wait until you have money left over to start saving. 

Include in your planning some emergency money that can be used to invest in your emergency fund. 

5. Emergency reserve

Before you start building your emergency fund, you need to pay off all your debts. 

And before you start investing, you need to create your emergency fund.

Think, if you lose your main source of income today, how long will you be able to survive or maintain your quality of life until you get another source of income?

If you need to carry out an important operation, where will you get the money from?

An emergency fund is for emergencies. When something unexpected happens, you don't have to take money from where you don't have it. 

It's like keeping money under your mattress and just as safe, however, you invest the money to avoid losing value due to inflation.

6. Save

Learning how to save can help you achieve your dreams efficiently. Sometimes it may take time, but you need to be focused, disciplined and celebrate each goal achieved. 

Taking on debt to achieve your goals is not the smartest or most economical alternative. The best thing to do is to save and invest the money you save.

For example, if you want to buy a house, save up and invest the money. After a few years, you will get back the amount invested plus interest.

However, if you instead take out a loan to buy the house, you will be stuck with debt for years.

Furthermore, you may pay a much higher amount due to the interest charged, which in this case, is not in your favor. 

Conclusion

As we can see, it is very important to have financial education to have a balanced financial life, a better quality of life and to stay away from debt. 

So, put our tips into practice today and take care of your finances. 

So, did you enjoy discovering the importance of financial education in the life of citizen? 

How about getting to know one of the best and safest investments in Brazil? Read the text and find out which is the best institution to invest in Tesouro Direto.