We would like to think education is, by its nature, valuable. Yet, not all things taught to us will be useful and some of it could even be incorrect. We should consider what is worth knowing in the finance sector, despite what is often taught in courses around the world. After all, just because something is taught around the world doesn’t make it true.
Personal finance problems
We might think the way to improve our finances and being able to manage our money is through taking courses. Yet, there has been some research indicating this is not actually the best way. As NPR notes, “There’s no clear link between taking personal finance classes and saving more, paying off debts or raising your credit score.”
The issue is the skills being taught are unhelpful to the real world, but also due to people’s inability to follow through. Due to the unpredictable nature of the market and finances.
As the article continues:
“Since financial products are always changing and people are prone to forget the specifics from class lessons, researchers suggest it might make sense to focus on teaching high schoolers how to find the financial facts they’ll one day need.”
The question then is what to do.
Personal finance solutions
Though when we think of education we think of young people, there’s no age gap to who should be educated. Everyone can benefit from a finance course, even people in businesses, like non financial managers. The focus can be directly on finances, but then it should be a specific section.
For example, instead of focusing on mortgages, rather educate yourself in loans. By being more specific, you allow yourself to have practical responses. This was found to be more useful than broad, sweeping attempts to understand entire categories.
Improving your mathematics skills also helps. As Lifehacker notes, more people would be making better investment decisions if they understood concepts like compound interest. The difficulty in understanding it is due to not fully understanding mathematical concepts. Such concepts are difficult, but they still remain important to many financial aspects of the world.
If we are going to engage in the financial world, it is better we do understand the concepts informing them.
By being more specific, focusing on more practical aspects affecting us and narrowing our focus, we can learn about the financial world in better ways. Ideally, this will make us better investors and business people.
(Header image source: Link)