script parts Flashcards
what is the issue
Financial illiteracy is a major issue occurring now more than ever before as people are exponentially falling into more debt and financial stress because of their inability to seek proper financial skills and make proper decisions with their money.
What is financial literacy?
Financial Literacy is the understanding of how to maintain financial health and being able to learn to make good income and profit while simultaneously managing the same money responsibly and thoroughly. It is one of the most valuable pieces of knowledge that one needs to learn to progress and stabilize their life so that they do not run into detrimental problems.
Affect of financial literacys absence
For most adults, the issue of financial illiteracy has been demeaning to their motivation to be more financially responsible. When this problem turns into something that cannot be reversed, bigger financial issues that come with financial instabilility like crippling debt may cause people to become completely drained of all their money due to the lack of important financial skills. When people are at a younger age, the effects are still felt but not threatening entirely as they are more of a warning for them to watch out for potential instability with finances when they grow up.
What is debt
Debt is a thing that individuals, Companies, and even corporations have when they owe money to another entity for a variety of reasons. Debt comes in many forms and is specifically categorized into two sub-sections good and bad debt. When someone takes out a loan for education purposes, for a house, or for a car they are making a long-term investment that will cause financial instability if not handled correctly. When it is handled correctly and an individual can pay back to the full extent and consistently it is good debt. Bad debt is the complete opposite of this where someone borrows money and is unsure or simply unable to pay back what they owe.
Heavier affect of financial literacy absence
Despite not being a major cause for more serious issues such as complete poverty and homelessness it is important to know that it is also a plausible cause for such issues when paired in combination with normal causes such as medical issues and traumatic events. This further proves how much of an issue financial illiteracy across America is now more than ever poverty and homelessness plague America and financial illiteracy just makes the whole situation worse.
teen financial confidence
It is very evident that the absence of Financial Literacy is causing issues for a variey of people within society and it’s not just people who have done the research that are aware of the issue but the same people who have the ability to end financial illiteracy for good are aware as well. Studies have shown that 74% of teens don’t feel confident about their financial education either.
Scope of the issue
This issue, at an outside glance, can be overlooked but is the clear cause of generational financial instability as the proper skills needed to be a financially literate person are not practiced nor learned normally within the education system. Learning how to do things like avoiding debt, Investing, budgeting, saving, etc. are very important when it comes to general finance. Without these strategies, the risk of financial ruin dramatically increases with expensive consequences.
how isAmerican affected
America’s financial literacy has not changed much over the years relationship with the concept of debt is conscerning. Americans have not only come to recognize debt as a byproduct of the American lifestyle but it has been normalized to a degree where if the right steps are not taken people would be blindly walking into a financial trap unprepared to tackle the responsibility of the debt and how to pay back loans and other. Many Americans who owe money whether that be student loans or other are being suffocated by the weight of the money they need to payback, it is of key importance for people who are in those situations to understand that when borrowing money it must be used to help an individual debt shouldn’t ever get to that point
fidelity investments study
when a study that was conducted by Fidelity Investments, only 64% of adults in the US were actually able to pass a simple financial literacy quiz. This issue is currently ruining lives or has the potential to do so as these results are more than concerning especially for grown professional adults who all have their own jobs and families to support
