Financial education should be introduced as compulsory subject

i. INTRODUCTION
It is an obvious fact that financial aspect is an important part of the daily life, as an adult and even as a young individual. Every one of us has to make financial decision to spend money for vital needs such as food, clothes, home and more. The question is whether to start with financial education as part of school program or to postpone it for a later stage in life. For me, I support this idea that financial education for teenagers is necessary. In many countries the discussion about financial education are getting more serious due to financial problems of young generation. Some people believed that financial education should be considered a mandatory subject at school. The common problem for those young people is that they don’t know how to spend money in right way. As we can see many advertisements often carry out the message, “Only 10 dollars a week, no deposits” which is misleading those young one think that living in debt is normal. Financial education is one of the solutions for this problem we mention above. The basic idea of financial education as a core school subject is to teach those young ones to understand the concept of using money and to estimate a risk of borrowing money to buy something in the future. For me, I support this idea that financial education for teenagers is necessary. The general factors that make financial education should be introduced as compulsory subject are children acquire an understanding economic, financial concepts with age, to be a tool to improve low levels of youth financial literacy and instill wise financial management.

NOR SHAHIRAH BINTI ISMAIL (2013885122) AC2204T

Financial education should be introduced as compulsory subject

i. Introduction
The general factors that make financial education should be introduced as compulsory subject are children acquire an understanding economic, financial concepts with age, to be a tool to improve low levels of youth financial literacy and instill wise financial management.

ii. Body A. Firstly, factor that makes financial education should be introduced as compulsory subject is children acquire an understanding of economic and financial concepts with age such as banks and saving. 1. Children make great strides in economic understanding between the ages of 6 and 12, such that children’s understanding is “essentially adult” around age 12 (Webley, 2005).

a. By age 9, children may understand that they can save with a bank to protect their money (Webley, 2005). b. A similar development in understanding has been observed for concepts such as understanding money, prices, and supply and demand (Webley, 2005).

2. The progress children may be attributable to age-related cognitive development, such as acquiring the ability to understand multiple causation or arithmetic (Webley, 2005).

a. Children’s economic independence increases greatly from the time that they are very young until they reach age 12 and beyond, and cross-cultural studies have shown differences in understanding rooted in experience b. Research on economics education (and some research on financial education, discussed below) demonstrates that it is possible to teach children economic or financial concepts (Webley, 2005). B. Financial education may be a tool to improve low levels of youth financial literacy

1. A school setting allows for financial education to be integrated into other topics, such as math (Beverly & Burkhalter, 2005).

a. There are family-based and out-of-school financial education programs (such as through 4-H or Girl Scouts), but most youth financial education occurs in schools (McCormick, 2009). b. In-school financial education makes reaching all children easier and allows for drawing on experienced teachers.

2. Financial education could teach them wise spending

a. In school, they would learn about how to make decisions on what to buy, buy only the necessities. b. Show them how much could be saved through wise planning.

C. Instill wise financial management that could overcome all the financial problems faced by adults nowadays.

1. Students are expected to have the financial knowledge and skills to successfully manage their financial lives and to know how to draw on additional information as needed a. Financial education could help to alleviate recent phenomenon i. Learn about compounded interest ii. Learn about investments iii. Learn about insurance

b. These include knowledge of money and asset management through banking, investment, and credit, understanding taxes, understanding concepts such as the time value of money and risk-pooling in insurance, and understanding how to act on financial knowledge to plan, implement, and evaluate financial decisions (McCormick, 2009).

2. Access and exposure to financial education varies from state to state and age group to age group.

a. The number of states with mandatory personal finance education standards is growing (36 in 2011, up from 28 in 2007), b. While personal characteristics such as future orientation do not fit under financial literacy as defined strictly by financial knowledge, they do influence individuals’ ability to act on financial knowledge

iii. Conclusion
In conclusion, I believe the general factors that make financial education should be introduced as compulsory subject are instill wise financial management, to be a tool to improve low levels of youth financial literacy and children acquire an understanding economic financial concepts with age. It would help individuals in future. Financial education will have a positive effect on all young ones and other subject such social commutations should be considered just as important as financial education.