Personal Financial Planning for Young Professional

Before we consider financial literacy in relation to the essential skills, it is important to understand what is meant by financial literacy. It has been defined financial literacy as “having skills, knowledge confidence to make responsible financial decisions”.

In today’s society there is a growing concern about financial literacy and the ability of individuals to make financial decisions. Essential skills are likely to contribute to personal financial success and serve as a foundation for the development of financial literacy and financial management skills. Consumers must confront financial decisions at young age in today’s demanding financial environment.

 Unfortunately, the consequences of poor financial decision making are becoming increasingly more serious. With the economic downturn and increased financial insecurity, there is greater risk and fewer resources to protect individual and families from poor financial decisions.Young people have access to more money and credit at young age. Financial literacy around the world is not sufficient to cope in today's demanding financial environment. It is important to possess well rounded financial literacy / knowledge ability to make sound financial decisions.

The following are some of the possible consequences of a lack economic and financial knowledge and skills. Those lacking economic and financial skills and knowledge are more likely to find that they are: 

• Spending beyond their means.
• Saving less than they need.
• Spending, saving, borrowing, and investing without guidance from a budget.
• Drawing less asset, targeted for the future, to cover the current costs.
• More likely to experience financial stress, which can affect their home life and work      situation.
• Less able to understand investment option and find access, and benefit from advice.
• More vulnerable to scams and misleading advertising.
• Making mistakes that can lead to have lasting consequences.