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The Importance of Financial Literacy

I am currently a junior in highschool, and I am already starting to think about my current and future expenses. It’s overwhelming to say the least. I have to pay for college, but I also have to pay for my car and everyday expenses, whilst also avoiding debt. What should I do? Who can help me? Where is the guidance? Schools lack proper support when it comes to educating students about the impending real world finances. Sure, we have the core Economics class, but this doesn’t cover enough. A better system needs to be created in order to prepare students for the increasing cost of living.

This is just a fraction of the effect that financial chores can have on someone who was never taught how to manage and invest their money. The last thing anyone wants is debt and the stress of working paycheck to paycheck. College is expensive. Life is expensive. So what’s the solution?

Financial literacy: being consciously aware of how to budget, save, invest, and manage your money. The top most successful people, and simply all successful people, have mastered this skill and learned how to avoid debt through the concepts that will be examined in future blogs. Educating yourself on this topic is imperative if you want to avoid negative consequences such as bankruptcy, debt, health issues, and bad credit. So, because schools are lacking a strong enough financial education, I have decided to self-learn and share my findings through LOUDWomen blog posts. Every month, I will be posting an article on a topic falling under the umbrella of financial literacy. My goal is to provide my readers with a simplified series of how they can grow their financial knowledge.

What is financial literacy?

In order to discuss the importance of financial literacy, we have to first understand what it is. Financial literacy, to put it simply, is the ability to understand your money, avoid debt, and make smart decisions with it. These circumstances in which you need to make smart decisions may include one of the five principles: earning, spending, saving, borrowing, and protecting. For example, when you begin to look for colleges, you will want to consider opportunity cost (relax if you don’t know what this is, we will be discussing it in future blogs) to guarantee that you are preparing yourself for long-term financial success. Financial literacy is an umbrella for topics such as compound interest, student loans, and debt management. These topics, and others, will be examined individually in a series of following blog posts, so stay tuned for those!

Why is financial literacy important, and what are the benefits?

Now that we know what financial literacy is, we can examine the importance of learning about it and how it can benefit you. I like to think of financial literacy as a new-found superpower: you have to first play around with it and try new things in order to get the hang of it, in which then you can use it to your advantage, e.g. protecting yourself. Having an understanding of financial literacy is great, but you have to put that knowledge to work, just like you have to practice controlling your superpower. Both long-term and short-term expenses need to be properly managed in order to avoid debt or bad credit. This is extremely important for future payments like student loans or buying your first home. With this ability to save, invest, and spend wisely, you are given a long list of benefits: feeling secure, being prepared for not only current, but future expenses, having retirement funds, etc.

To conclude, learning about how to be financially literate opens doors to a surplus of opportunities. Do you aspire to travel the world? If so, learning how to save your money can help you achieve this. Or, if you like to spend big, you can learn to budget. If you’re intrigued, keep an eye out for my future blog posts. I will be covering topics such as how to pay for college, making money while you’re sleeping, creating a budget, etc. For most of us, the real world is approaching fast, and feeling secure in our money can make it feel a whole less daunting.

Ava Wieczorek

Grade 11



Fernando, Jason. “Financial Literacy: What It Is, and Why It Is So Important.” Investopedia, Accessed 18 Aug 2023.

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