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Frequently Asked Questions
It refers to the combination of credit, financial, and debt management skills that are necessary for making informed financial decisions. It is about the ability to manage money, create a budget, and how to invest funds for future use.
There are five main components of financial education planning:
- Prioritizing Saving Money
- Basics of Budgeting
- Understanding Debt
- Financial safety & Identity Theft
- How Investing Works
Every person needs to have financial knowledge and skills, from children, college students to investors and entrepreneurs. The main components of financial education are taught in colleges and universities. Financial education is also offered by Arrowroot Family Office financial advisors to adults and entrepreneurs who cannot attend colleges.
Financial education planning is important because it prepares individuals with the skills required to manage funds and ensure they do not struggle financially. It helps individuals take control of their debts and investments, learn how to budget, and avoid fraud. Without financial literacy, investors and business owners are left vulnerable to misappropriation of funds.
Saving is a great challenge, especially for individuals earning a low income. To save while on a tight budget, one should make small changes on the budget to reduce expenses. Focusing on long-term goals instead of short-term goals can help achieve personal goals by saving a small amount of money.
Borrowing for investment is an effective way of increasing potential returns for investors. However, borrowers should have a clear investment strategy to avoid incurring losses if things fail to work out.
Evidence shows that school-based financial programs are effective in improving students’ knowledge and skills in the management of finances. Other programs offered by company financial advisors have also helped millions of entrepreneurs gain exceptional knowledge on choice of investment, identification of frauds, and budgeting.
Insurance planning is an essential factor in financial education that ensures individuals have a clear plan for protecting loved ones, their business, or property in case of an accident. Unexpected events such as job loss or death can be difficult to adapt to without an insurance plan. Therefore, financial education planning encourages the need for contingency planning to avoid being caught unaware.