Cryptocurrency has given people financial freedom they didn’t know before. Although this is a good thing, most people are unprepared to take responsibility for their own money.
Most of all we know comes from a centralized mindset. From every angle possible, at work, in society and even our banks. In our banks, an authority holds our money, restricting access to it according to their terms.
Today, with the cryptocurrency freedom we are gaining comes the need for financial education. Not to say that it wasn’t needed previously, after all, financial literacy has always been crucial.
According to the S&P Global FinLit Survey, the countries with the highest financial literacy are Australia, Canada, Denmark, Finland, Germany, Israel, the Netherlands, Norway, Sweden, and the United Kingdom.
The survey also showed that 1 in 3 adults around the world has some level of basic financial concepts.
Women, the poor, and the less educated are the most affected by the low financial literacy. Such classes are constantly an aim for government programs for “financial inclusion”. In other words, they give them opportunities that can lead to debt, such as credit cards. And without financial literacy, guess where they will end up?
It has never been so easy to acquire a credit card, and don’t think banks are choosing to be nicer. They are taking advantage of the gap, the lack of financial knowledge.
Banks offer credit cards to the financially illiterate with ridiculous interest rates. As a result, they make double off of these people when they do not pay back on time.
“Financial ignorance carries significant costs.”
Can you see how the cryptocurrency community needs financial education more than ever?
It would be useless to give people financial freedom they cannot handle. Therefore, just as important as it is to achieve financial freedom, so it is to know what to do with all that freedom.
So, what is financial literacy after all?
Financial literacy is a set of skills which allows people to make wise decisions with their money.
The main objective of financial literacy is to help people to cultivate a stronger understanding of how money works. Most importantly to give them the basics of financial concepts so that people can handle their money better.
How many crypto investors can say they have the right set of skills to make wise decisions about their finances? I´d love to know the answer to that.
According to Dave Ramsey, financial advisor, in the U.S. a well-developed country has nearly four out of five workers living paycheck to paycheck. More than a quarter never save money, and almost 75% are in some form of debt.
If America is displaying this kind of numbers, think of the catastrophic numbers for countries under economic crisis and third world countries.
The thing is, these are the exact places where cryptocurrencies have great potential of uplifting the economy, as with Venezuela, Greece, and African nations.
What we can predict will happen is this new virtual currency system crashing its financial freedom against the financial crisis around the world, which is great news for their economy, and, it is already happening in the countries mentioned above, but then what?
Well, here is what cannot happen, we can’t just save a nation´s economy through cryptos, and then watch it destroy itself again for lack of financial education, we must think in the long run and prevent it while we can.
This pioneering time is the perfect time to educate our cryptocurrency communities.
With a basic understanding of financial concepts, people would be equipped to make smart financial decisions towards saving, investing, borrowing, and more.
The cryptocurrency industry needs financially well-informed people; it needs people who are willing to invest in financial knowledge in order to achieve lasting success.
Here are the three main set of financial literacy skills:
One essential thing to learn about financial management is that you must spend less than you earn, but most people are spending more than what they make because they aren’t budgeting.
Budgeting can help people achieve their goals and dreams; it can help you stay within what you can afford while helping you save.
Before you can save to buy a car or a house, the most important type of savings is your emergency fund. Rules say that one should have saved enough to be able to survive between 3 to 6 months in case of an emergency.
You can always start with a small emergency fund like $1,000 and go on from there.
Financial literacy can teach people how debt is hurting their future, how it may not be a good idea to buy a home instead of paying rent, how it may not be a good idea to buy a car instead of using UBER, how it may not be a good idea to invest money you cannot afford to lose.
It can teach us that some choices may seem obviously better. However, once you put it down on paper, you may find out they aren’t that great. What do the numbers say?
To conclude, make sure you:
- Develop the right attitude;
- Grow your awareness;
- Increase Knowledge;
- Turn the knowledge into behavior (most important step);
- Start achieving financial success;
- Share the urgency of acquiring financial literacy with others;
- Pass it on to your children (just as important as the most import step because they are the future).
We must talk about financial literacy and financial management just as much as we talk about cryptocurrency financial freedom.
Whatever you choose to do, do something; spread the word, spread out the need for financial education, and most importantly get started.
Why don’t you share this article with somebody?
Let us know your thoughts in the comments.
We wish you the safest and most successful crypto journey.
Disclaimer: Our team works hard to bring you the best content in the cryptocurrency market, but it is only our point of view and not legal advice, and may be divergent from other opinions, so please do not make any decisions without concluding studies of your own to understand the profit possibilities and uncertainties involved at your own risk.