This article is by staff writer Kristin Wong.

Happy Financial Literacy month!

I’ll be honest. Four or five years ago, “financial literacy” meant nothing to me. I was far from being financially literate, and I didn’t really understand why it was important. I’ve always been pretty good at being frugal. But I never truly understood it. And I never understood just how much there is to learn in order to achieve financial security and, ultimately, financial independence.

In 2011-ish, somehow I became more interested in my finances. A few things were responsible for this change:

  • I made really stupid money mistakes during my career switch.

  • I was approaching 30. I didn’t want to live paycheck to paycheck anymore.

  • I read a lot of really good articles and posts on the topic of personal finance. Of course, this includes the writing at Get Rich Slowly. And Donna Freedman kind of became my frugal hero.

It’s amazing to think of where I was financially in 2011 and where I am now. My financial mind-set has drastically improved. Don’t get me wrong — I still have a long road ahead. But for the first time in my young life, I feel completely in control of my money. I’m not scared of it a bit! And that is a pretty amazing feeling. But that’s what knowledge and education does: it empowers you.

So I’ve been thinking about money and knowledge a lot lately, especially with it being Financial Literacy Month. We often discuss how financial literacy should be learned at a young age. Some believe it should be a requirement in schools. In fact, USA Today reports that, since 2011, four states have made a personal finance class a graduation requirement.

As reader Beth once pointed out, we should consider our educators into this equation too. Teachers have so much work and responsibility as it is, so I’m empathetic to her point.

But responsibility aside, I think we can all agree that learning about financial literacy at a young age is important. There are definitely some money basics I should have learned before I started college. Recently, I wondered: If I had to make a financial literacy syllabus, what would I put on it? Basically, what do I wish I had known about money when I was younger? Or, if I ever decide to have kids, what would I want them to know about money?

I think my personal finance syllabus would look something like this:

  • Understanding the gap: Living below your means: I remember the first time I read about the “gap” between how much you earn and how much you spend being the key to wealth. It melted my face. It’s so simple and obvious, yet so overlooked. When I finally “got it,” it was because I realized that the bigger the gap, the better I could achieve my financial goals.
  • Compound interest: How it can work for (and against) you: We all know compound interest is pretty magical. But when you actually see the numbers, it’s kind of surprising. I’ve written about how a $100 pair of Doc Martens spiraled me into almost a couple thousand dollars worth of debt, thanks in part to compound interest. I didn’t understand the power of it back then.
  • Why an emergency fund is the foundation of your financial plan: When I was a teen, my dad always encouraged me to have a “cushion” in my bank account. So, thankfully, I’ve always kind of understood the role of an emergency fund. Whether they’re minor or major, emergencies happen. If you’re trying to work toward a financial goal, it can be really frustrating to experience these setbacks. Sometimes that frustration makes people quit. A cushion makes those setbacks a little less discouraging. In a way, it helps propel your goals!
  • Realistic budgeting: I’d put this on a syllabus because it’s a perfect example of mind over matter. You can crunch the numbers all you want — at the end of the day, money is more about mind than it is about math. I mean, if you can make a supertight budget and never break it, well, I bow down to you. You are a frugal hero among men and I am not worthy. But, for most of us, setting too-high standards can backfire. I can’t think of how many times I busted my budget because I didn’t give myself any elbow room. I thought I was exhibiting good financial skills by telling myself, “you will spend zero dollars on entertainment this month.” It would have helped to understand that I’m human, and I should probably account for that.
  • A guide to mindful spending: This probably wouldn’t be on everyone’s syllabus, but it’s something that’s important to me. As a whole, I think our culture would benefit from a little more conscious consumerism. We’re very wasteful. It’s ingrained in us. At least for me, that wastefulness has affected my personal finances in one way or another.
  • How to get started with investing — and then forget about it: This is something I’ve only recently learned. I’ll admit, for years, I’ve been scared of and intimidated by investing. It seemed like a maze to me — I didn’t even know where to begin. But I jumped in anyway, and it’s really not that scary. One of the most important lessons I’ve learned is something that J.D. recently wrote: “Ignore the news and ignore your fund.” It’s the same strategy Warren Buffett touts, and while not everyone agrees with it — well, I guess I do. Investing is more complex than budgeting and saving, yes, but it’s a big part of personal finance. And I think adding it to a syllabus would make it less scary.

So , yeah — that’s my syllabus for Personal Finance 101. And as I continue to learn about money, I imagine that syllabus would grow. For now, that’s what I’d put in a beginner’s guide to financial literacy. But there’s probably much, much more that can (and should) be added to this syllabus, especially considering our economic climate. But I won’t drag this out any longer. I want to read your thoughts.

For this week’s Ask the Readers, I’d like to know: What’s on your personal finance syllabus? What do you wish you had known sooner, and what do you think our younger generations could stand to learn more about now?

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