The advantages of gaining financial literacy at an early age



THE Department of Education (DepEd) has finally added financial literacy to the basic education curriculum. This means it has become mandatory for schools to teach their students financial literacy programs, specifically financial management and investments. This is a very good move. Up till now, financial literacy has not been taught in Philippine schools.

Over the years, we didn’t have a proper education when it came to managing our finances; we get our knowledge in this area from our parents and from our experiences, which may not be always necessarily good. If you have parents with bad financial behavior, then most likely you will also end up like them. The opposite will happen if your parents have good financial behaviors and they have passed them on to you.

Bad experiences with money lead to fear or learning. There are a lot of scams. If you have accidentally invested in a scam, you could become afraid of investing anywhere subsequently, thinking that investment plans are most likely scams.

Acquiring financial literacy early in life will always be an advantage. Here are some important advantages an early education in financial management and investment can give.

Developing good financial behaviors early. Your financial behavior is the critical factor for you to attain financial freedom. So, financial literacy is the first step; but it doesn’t mean that if someone were financially literate he would certainly be good in handling his finances and achieving financial freedom. Success in personal finance is not that simple.

The advantage of acquiring financial literacy is that it will teach you how to budget money. By comparing your list of essential expenditure with actual expenses, you will find that you are overspending. Financial literacy will make you aware of the basic problem, which might be that you are spending too much on Uber. That means, your attitude towards the comfort of your transport is making it difficult for you to stay within your budget. So you need to adjust by avoiding Uber rides.

The more adjustments you make in handling your money the better your finances will be.

Developing long-term thinking. Financial literacy also teaches you to project values of your money in the future so that you can make better decisions in handling them. Gaining such literacy at an early age will help envision your financial goals in life. These financial goals will lead you to think long-term.

Developing the skill for forward planning at an early age can make you a great decision-maker with a financial perspective. It will help you utilize your income and help you identify the financial products and services that will best suit you.

Long-term thinking will help you not only in managing your finances but it will also help you in other areas of life like health, relationships, and career.

Developing planning skills. Financial planning. Our interests change; our responsibilities change, and along with that the way we spend money also will change. Having financial literacy will teach you ‘life cycles’ and will help you develop your planning skills; so you will be prepared for financial challenges.

Developing discipline early. Developing discipline in handling finances is tough because personal finance is behavioral. Therefore, to be consistent and disciplined is challenging. One way to succeed here is through tracking expenses. Some useful apps that were recommended by in one of its articles are Expensify, Wally, and Monefy.

When financial planning takes place, it doesn’t stop there. Execution of the financial plan is key to ac hieving financial freedom.

It takes discipline to stay within a budget, to be invested when the markets are crashing, to stay away from too much credit card usage, and to save money for your emergency fund.

Having financial literacy at an early age will help you develop your discipline toward your finances so that you will have more chances of becoming successful in the future.

I encourage everyone reading this to be financially literate as early as possible because it takes time to develop the discipline in handling money. It will also help you avoid making financial mistakes in your lifetime.

Abraham Lee is the 2nd runner up of the 2015 #SINAG Financial Literacy Digital Journalism Awards by Sun Life Financial. He blogs about personal finance at


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1 Comment

  1. Increasing the number of school year is not a solution. It is changing the school curriculum and quality of the teachers that is the answer. I still remember in UP we have 12 units of Spanish that are mandatory in the curriculum. How stupid !