Applying to Life the Concepts of Principles of Finance

Finance
Name
Institutional Affiliation
Finance
The best gift parents can give to their children is financial literacy, which is comparable to classes attended in schools. Financial literacy involves learning the financial concepts and applying them in one’s life. While it is imperative to understand money concepts such as bills, savings, taxes, budgets, investing, and fees, Cheng (2018) reports that about two-thirds of American population score poorly in basic tests in financial literacy. FINRA Foundation study reported that americans display low financial literacy levels and have challenges in applying skills of financial literacy to real-life events (Cheng, 2018). Unfortunately, only five states in the united states: Virginia, Alabama, Tennessee, Missouri, and Utah demand a personal finance for one to gradute from high school. Solomon, Nhete, and Sithole (2018) also report that personal financial literacy is low in both developed and develoing countries. It is important for parents to voice their concerns over the lack of financial education in schools. In this paper, I will discuss how concepts in “Principles of Finance” such as earning, saving, spending, borrowing, and investing apply to my personal life.
In regards to earning, financial education teaches one the value of work by paying more for any extra work. I learnt that when I helped relatives with cleaning a compound, I earned extra oney and save it in a jar or piggy bank. My parents could check the content of the piggy bank after some days to see the aount of money saved. It did not stop there, but my parents encouraged me to invest the amount saved. My parents often asked about the products I wanted to invest in and the reasons for my choices....