Good or bad, the pandemic changed the game for many industries, introducing new use cases for technologies deemed only entraining. From virtual reality and metaverse games to virtual assets, Web3 was one of the industries that was disrupted the most by the new normal.
The rush of users into blockchain games introduced a new part of the Millennial and Gen Z generations with utility tokens. The promising idea of the “Play to Earn” model compelled this new crowd to investigate other investment opportunities offered by cryptocurrencies, driving crypto adoption even higher.
However, as beneficial as it sounds for the crypto space, this new wave of adoption did put more weight on our role as industry advocates and leaders to improve the knowledge within the space. Better financial knowledge can indeed lead to better decision-making, enabling people to manage their financial risk, minimize their loss, and avoid exploitation and excessive debt.
However, won’t it be too late if we start educating our industry members when they are already in the game?
Financial Literacy for Kids: Can It Teach Our Future Traders How to Minimize Their Risks?
Factors like technology, innovation, and digital solutions are driving more youth into the financial world from an early age. Even though many trading platforms require their users to be at least 18 years old, many enter the markets before this age.
We are living in an era that our children want to take control over their financial life, exploring different ways they can put their money to work. And as financial literacy seems to be playing catch up with the fast-paced developments in the financial industry, this is our job as industry leaders to get to work and make the necessary changes.
Kids in Finance
We start allocating money to our kids from an early age, telling them specifically how they should spend it. As they grow up, we keep providing them with this pocket money, however, we give them more liberty in spending.
Considering this, we should not even question the necessity of financial literacy for kids as they are already involved in finance to some extent. The financial education becomes even more important as our children start their own part-time jobs, earning money based on their skills for the first time in their lives.
As schools are still contemplating whether or not to bring new finance subjects like blockchain and crypto education to classrooms, we can take it upon ourselves to put in place the required plan for our children to develop their financial skillset. Along the way, they will learn how to manage their fund when it’s relatively small in value and contains manageable risks.
More importantly, these skills will come in handy at a later stage in life, helping them manage their finances, utilize their savings, and generate returns. The vitality of this is especially evident for the crypto market as it’s experiencing some downfall due to the lack of transparency and proper management, something we all need to learn more about and seek in every financial institution we’re trusting our funds with.
The Effects of Financial Literacy Go Beyond Expectations
According to the Global Findex 2021 database, 1.4 billion people worldwide remain unbanked with education playing a major role in this. This number highlight the importance of initiatives such as Global Money Week, which aims to ensure that:
young people, from an early age, are financially aware, and are gradually acquiring the knowledge, skills, attitudes, and behaviors necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience.
Low levels of financial competence have far-reaching consequences, both at micro and macro levels. This has especially become a pressing issue with the advent of virtual currencies as they bring an advanced financial world to experienced and inexperienced population alike. And like every young and innovative creation, crypto assets come with myriad benefits and relatively greater risks. This risk can lead to great losses if not managed properly, shadowing all the benefits of this promising innovation in a single market crash.
Financial literacy is our way to that apprised state where every member holds the required knowledge to manage their finances responsibly and make well-informed financial decisions; a promising goal that will become more achievable if we start educating our potential future traders and investors from a very young age.