How to design a financial literacy program – In today’s world, a lot of people lack the proper knowledge on how to manage money and get the best out of it. While we believe that money touches all aspects of our lives and that without money, we can’t make money, unfortunately, we lack the knowledge that will help us make that money. So what’s the solution? The best solution for this problem so far is creating awareness through financial literacy programs. This article will talk about how to design a financial literacy program, what financial literacy itself is, and the components of financial literacy. So let’s get started.
What Is A Financial Literacy Program?
Financial literacy, in simple terms, can be defined as the cognitive understanding of how finance and wealth work. It means having the skills that require you to manage money. These skills include knowing how to invest, budget, borrow, and pay taxes, understanding personal financial management differentiating between necessity and luxury, knowing when to spend, and the best time to spend. A person that doesn’t have this skill can be called a financial illiterate.
The financial industry regulation reported that more than 60% of people don’t have financial knowledge. Financial literacy has many benefits, which we will discuss later in this article. It enables you to be prepared for the worst outcomes regarding finance and investments. This will reduce the chances of you experiencing personal economic distress. Being financially literate is highly important in every society. This is because of the daily facet that everybody experiences, such as loans, credit cards, health insurance, mortgage, investments, and many more.
What Are The Components Of A Financial Literacy Program
There are many components attached to financial literacy. These components allow you to possess the knowledge to help you effectively manage your finances. We will discuss some of these components below;
When it comes to budgeting, four components make up a budget. These components are spending, investment saving, and giving away. If you want to allocate your money properly, you must create the best balance throughout how you use your money. Overall, when creating a budget, you should ensure that you have allocated money to pay off all your debts. Then, you allocate the rest for other investments and savings.
Before you can successfully become financially literate, you must learn all the important components related to investment. Some of these components you should learn which will help you secure big investments without experiencing much loss include interest rates, price levels, diversifications, risks mitigation, and indexes. Learning these important investment components will help you make the best decision whenever you are investing and will lead to great outcomes.
Most of us find ourselves in a situation where we need to borrow money in one way or the other at one point in our life. To ensure you borrow in the right place and properly, you must learn how interest works and other things like the time value, the interest rates, the payment period, and the entire loan structure. Once you sufficiently understand these criteria, your financial literacy will increase. This will help you have practical borrowing guidelines and decrease the stress that comes with borrowing money.
Another crucial component of the financial literacy program is the understanding of how tax works. You must understand how tax can affect your entire net income. Every source of income is taxed separately. Once you are familiar with each of them, you will have a better way to manage your income.
5. Personal financial management
The most important financial literacy component is personal management which features all the other components mentioned above. Before you can secure financial security, you must learn how to balance all the components we have mentioned. Understanding all of them will guarantee you an increased financial literacy.
How To Design A Financial Literacy Program
Financial literacy is important in every aspect of life. This applies to healthy, disabled, or any individual that breathes. Below are ways you can design a financial literacy program.
1. Create an understanding of why it is important to learn financial literacy
The first step to creating a financial literacy program is to understand its importance. They should first learn the importance of financial literacy and the resources they need to prepare for the future. Financial literacy promotes inclusion and will enable everyone to participate in money-related decisions.
2. Determine your budget
When creating a program, you will be required to spend money. So here, determine how much you can spend and how many people you can afford to teach the program. Determining your budget will also let you know the curriculum you can use when doing the program. Since many curricula are available, you can choose anyone that will perfectly fit your budget and deliver the impact you want to make to the people. You can check out organizations like Jump$start that collaborate with people interested in designing financial literacy programs for students from prekindergarten to college.
3. Choose the right curriculum according to the people you intended the program for.
As you start to review the curriculum, it’s necessary also to ask yourself some important questions like;
- How much time do you have to deliver the information
- Is the curriculum you want to teach align with your country or states standards
- Is there flexibility in the curriculum
- Can you incorporate the curriculum into a community-based program
- Does the curriculum have a copyright? And can it fit the needs of the people you intend the program for?
4. Look for partners that can assist you
To effectively deliver the program, we recommend you should look for partners that can assist you. These people can be credit unions, internal revenue services, debt management companies, and other financial institutions. You can also look for guest speakers on certain topics, which will improve the student’s understanding of the program. For example, you can partner with a banking organization, so when delivering their own speech, they will teach the students basic banking training, how to open an account if they don’t have one, how to use the ATM, the investments schemes available in their banks and many more. This way, the students will feel included, and they will be inclined to learn.
5. Establish a peer to peer learning opportunities
In the program, create an opportunity for peer-to-peer learning. People tend to learn more when they are among their peers compared to when they are alone or with teachers. This also creates a SafeZone for those that are afraid of asking questions during the program
6. Have fun, and ensure to be creative
While doing the program, it’s worth noting that being creative and fun will make the entire journey easy and less stressful. You should understand that people deal with money every day, so by designing a financial literacy program, they will understand how to balance their checkbooks successfully.
Being financially literate is highly beneficial in every aspect of life. There are many ways you can organize a financial literacy program. You can follow the tips we mentioned above to learn how to design a financial literacy program. Remember, the goal is to educate people on managing their income in various ways and reduce risks and losses.
Frequently Asked Questions
Why is financial literacy important?
Financial literacy is essential because it empowers individuals to make informed financial decisions, manage their money effectively, and achieve their financial goals. It helps in building a strong foundation for financial well-being and enables individuals to navigate complex financial landscapes confidently.
Should I include guest speakers in my financial literacy program?
Including guest speakers in your financial literacy program can add value and provide different perspectives. Inviting financial professionals, successful entrepreneurs, or individuals with personal finance expertise can offer insights and practical tips to the participants.
How long should a financial literacy program be?
The duration of a financial literacy program can vary depending on the depth of the topics covered and the target audience. It can range from a single workshop or seminar to a series of sessions spread over several weeks or months. Consider the time constraints of your audience and the availability of resources while deciding the program’s duration.
Are there any resources available to help design a financial literacy program?
Yes, there are various resources available to help design a financial literacy program. Look for educational materials from reputable financial institutions, government agencies, and nonprofit organizations specializing in financial literacy. Online platforms, textbooks, and workshops can also provide valuable insights and guidance.
What are some important topics to include in a financial literacy program?
Some important topics to include in a financial literacy program are budgeting, saving and investing, debt management, credit scores, understanding financial products (such as loans, insurance, and credit cards), taxes, retirement planning, and basic financial principles.
Investopedia.com – Financial literacy
Wealthygen.org – financial literacy program
Opploans.com – why is financial literacy important
Gtbank.com – Financial literacy
Richer.ca – Financial literacy program