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If I learned anything from my parents’ financial downfalls, it’s that you need to make informed decisions about money.

We lived well growing up. We were the typical southern California family with a ranch in an expensive Los Angeles suburb with multiple (leased) cars and a boat.

That is, until my dad lost his job of over 20 years at a major public corporation. I was 11. We lost our home and moved to Oregon to find cheaper housing. After about three years there, my dad accepted a new job back in southern California and we were all set to move back.

But then, after putting a down payment on a California home after he’d already sold our Oregon home, my dad lost his (new) job. Long story short, we ended up spending upwards of $20,000 on a summer trip while basically homeless. Spending on travel instead of saving kicked off my family’s financial woes.

If you don’t understand personal finance, you’re more likely to experience financial stress. This is because you’ll constantly worry about money, and whether you’re making the right decisions with your finances.

Financial stress can take a toll on your mental and physical health, and it can even lead to relationship problems. In fact, one study showed that 70% of married or cohabitating Americans have had a disagreement with their partner about finances in the past year. It also showed that financial ‘infidelity’ is enough to end about 40% of relationships.

My parents stayed together and are now enjoying life in Florida, but we need to rethink the way we talk about financial literacy. Most of us don’t learn about money until we’re older, if at all. And oftentimes it’s because we’re forced to (you buy a home) or you get into trouble (you’re delinquent on a car loan payment).

Part of the reason we aren’t taught this is because it’s not mandated. Having access to financial education earlier in schools is a huge step, but that’s only half the battle.

The other half is taking ownership of your education. There are real costs to not being financially literate. You don’t need to know everything, but understanding the basics of interest, investing and taxes will go a long way to help you build wealth over time.

Why Is Access to Financial Education So Important?

Good financial decisions impact just about every area of your life. They affect when you retire, the quality of education you receive, the foods you eat, your access to healthcare and so much more.

If you don’t know anything about personal finance, you’re missing out on opportunities to save money. This doesn’t just mean putting cash into a savings account; it also means knowing how to invest in a 401(k), or how to take advantage of tax-advantaged accounts like IRAs. As a result, you could end up paying thousands of dollars more in taxes than you need to.

In today’s economy, many employers are looking for candidates who have a basic understanding of financial concepts. If you don’t have this knowledge, it may be difficult to find a job after graduation. My advice to students is not to ignore Accounting or Finance classes. In fact, I’d encourage you to take electives that cover these topics in greater depth.

If you’re not familiar with key financial topics, you’ll likely be less prepared for unexpected expenses, too. On a small level, this could be something like your car breaking down. But the problem compounds as the stakes get higher: What if you lose your job or get sick and have to take some time off work while also racking up medical bills? You may not have the savings or the credit available to cover these unexpected costs. As a result, you could find yourself in debt, or even bankrupted, by these unexpected financial events.

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So let’s look at some of the ways that a basic grasp of personal finance can help you get ahead.

Avoiding Debt

One of the most important aspects of personal finance is learning how to manage debt. Credit cards, student loans and other types of debt can be difficult to repay if you don’t have a good understanding of interest rates and other financial concepts.

For example, a 1% difference in your mortgage rate can make a substantial financial difference both to your payment and the total amount you’ve paid over time. Or you may decide that a $20,000 car is better for your future finances, even when you qualify for a $40,000 car loan.

Without a full understanding of your overall financial picture, that shiny new car might be too much to resist.

Building Wealth

Another important aspect of financial education is learning how to build wealth over time. If you don’t have a good understanding of financial concepts, it’ll be difficult to make smart decisions about saving for retirement or investing in a 529 college savings plan when you have kids, for instance.

However, if you understand high-yield savings accounts, how banks work and what it means to own stock, you’ll be able to make sound decisions about how to best save for your (and your family’s) future.

Failure to properly save for your future mean that financial emergencies will likely wreak havoc on your life.

Making Smarter Investments

If you don’t understand basic financial concepts, it can be difficult to make wise investment choices.

Investing can be intimidating, which keeps many people from even getting started, but when you know the basics, it can be much more approachable.

I know from experience — both good and bad — that a single investment decision could change the outcome of your entire portfolio for years, if not forever. It sounds dramatic, but imagine putting all your money into Bitcoin at $61,000 thinking it would grow to $200,000. As of this writing, it hovers around $19,000.

That’s a dangerous game to play. However, if you’ve spent time understanding the markets (and, now, unregulated markets) and how they work, you will be able to make sound decisions about which ones are right for you.

Achieving Financial Goals

One of the most important concepts I learned in college was the time value of money.

It’s simple, but when you understand how money can grow exponentially, this can dramatically shift how you make financial decisions when you have a long-term vision for the future.

So whether you want to buy a home, retire early or send your kids to college with no student loans, taking advantage of financial education — through blogs, videos, podcasts and courses, many of them available for free online — will help you develop an iron-clad plan to reach your personal financial goals as early as possible.

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