FINANCIAL ILLITERACY, A GLOBAL CHALLENGE by N’Kaos William

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WHAT IS FINANCIAL ILLITERACY?

Investopedia gives a financial illiteracy definition by way of defining financial literacy. They indirectly define financial illiteracy as not being able to reduce debt over time, pay bills in a timely manner or even reconcile a bank account. As shocking as it may seem that people in the Nigeria lack these skills, Investopedia quotes an even more shocking statistic from the Financial Industry Regulatory Authority (FINRA) which states that a full 63% of Nigerians are financially illiterate. That is, almost two-thirds of Nigeria’s population don’t know how to manage the most basic operations of money that are necessary for everyday life.

One Challenge, Many Effects

Financial Illiteracy causes broken homes, school dropouts, dependency on predatory lending (payday loans) and government benefits, health issues (stress, depression, anxiety), bankruptcies, foreclosures, divorces, homelessness, deficiency in economic development, and even murder-suicide in some extreme cases. Due to lack of adequate financial skills, majority of youth follow the same patterns as their parents with no or little chance of breaking the cycle.

Financial Illiteracy is costly

In 2011 Arne Duncan, U.S. Secretary of Education, declared Financial Literacy as an essential component of elementary education and in 2013, California Assembly Bill 166 incorporated the need for Financial Literacy in textbooks however as of today this education is missing in public schools. Today’s financial challenges are a testimonial to a growing need for specific education as more and more families and individuals become victims of their financial illiteracy. Based on a 2012 report by the PEW Charitable Trust, every year 12M Americans utilize payday loans for their life necessities and pay $3.4B in excess fees. These difficulties pose greater challenges in the socioeconomic disadvantaged areas.

Effects of Financial Illiteracy on Physical, Mental, Emotional, Spiritual Health

Various forms of illnesses and health are linked to how individuals manage their finances. Nutritional benefits are often sacrificed because of poor financial decisions.

BUILD YOUR DECISION MAKING TODAY AND KILL FINANCIAL ILLITERACY!

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