Financial literacy plays a vital role in a person’s financial health, deciding whether they are successful or not. This essay believes that financial education is needed for personal achievement. This is because while financial education contributes to individual financial resilience and provides them money management skills, insufficient financial knowledge leads to vulnerability and weakness, and the inability to invest effectively.
On one hand, with a solid financial foundation, individuals will foster budgeting skills and gain financial resilience. Managing money effectively means splitting the after-tax income into various categories. This allows individuals to save as much money as possible for future goals, while still being able to cover basic necessities and potential expenses. A person who divides their money effectively is able to accumulate wealth and pay off debt. Moreover, adequate financial knowledge increases a person’s ability to overcome financial hardship, or even global economic crisis. This keeps them strong in and after a financial difficulty. For instance, a financially educated student can cover their basic needs and daily costs even though having financial limitations and less family support.
On the other hand, Financial illiteracy makes a person vulnerable and enables them to expand their money by investing. Those who have a lack of financial knowledge are at risk of being scammed and getting involved in illegal business, for example, “quick-rich” schemes that attract numerous people on social media are just lies from some unreliable gurus. This has caused thousands of people to lose their money and their assets. Furthermore, financial illiteracy also leads to insufficient investing knowledge, which enables individuals to develop their financial capacity. As a result, preventing people from achieving financial success.
In conclusion, I agree that financial literacy is a contributing factor to an individual personal achievement. Lack of financial knowledge can stop personal development and the ability to thrive.