Why does financial literacy need to start young?

dr Nidhi Duggal has now celebrated 24 years as Principal, including 13 years as Principal of 13 colleges and 3 schools. She also has a proven track record of ensuring student achievement through research-based strategies. Besides her fantastic journey of experience, she also works with the Bharat Vikas Parishad and an NGO called Pankh where she is responsible for supporting 33 children. dr Duggal has authored two Hindi books: Upvan for Musket Publishing and Kanak for Hindi Vikas Sansthan.

Schools teach children the principles of math, but very rarely how to apply these lessons to financial planning. Kids may be good with numbers by the time they graduate, but financial planning has many more concepts like debt management, profitable or emergency savings, the time value of money, and efficient budgeting. From counting coins in kindergarten to future financial management in your own company – the price of money has to be explained to the young minds who are currently being promoted.

Financial literacy was introduced as a subject by CBSE in 2015 to provide financial literacy for students in grades 9 and 10. Through this addition to the curriculum, students are expected to learn how to open a bank account, how to obtain and use a debit card, learn the basics of internet banking, and learn about some other financial services. Students will learn financial management concepts such as saving money, starting a business, and setting life goals. However, things have taken a turn for the better.

Financial literacy is such an important issue that the Reserve Bank of India (RBI) has developed a curriculum that is recommended for all states to implement. This financial literacy program is currently being implemented in the syllabus for grades 6 to 10 in particular. This leads us to wonder when would it be better to teach students how to distinguish between their needs and wants than when they were children.


What is financial literacy?

Financial literacy is not just about knowing basic financial terms, but also about possessing the skills needed to develop financial acumen. All we have to do is build a strong foundation by giving them perspective and building habits.

Financial education often focuses on teaching people of all ages how to manage their personal finances, recognize the true value of money, create and stick to a budget, and invest their money wisely.

Over the generations, children learn quickly, become perceptive, become tech-savvy, and attentive. They pick up habits even faster than we can imagine. They develop a feeling for needs, desires and lifestyle at an early age. What they forget is that saving and investing are essential to a safe and happy future.

Through hands-on exercises, children can understand the basics of finance throughout their school years. Financial education for children would help them throughout life.

The agreement of its relevance

Teaching children financial literacy is the best way to improve the financial capacity of today’s young people. It will help them become self-sufficient individuals who can achieve financial stability. In addition, tomorrow’s financially literate people will contribute to the financial growth of society because they foster an entrepreneurial spirit that will translate into business owners, who in turn will sustain the economy.

Although kids have access to unlimited online resources to learn about investing, budgeting and tax planning, they need the right guidance to understand how to value money and use it efficiently.

What you learn in your early years, you carry with you throughout your life. For this reason, when educating children financially, children are taught about the concept of accountability from the very beginning. This attitude helps students not only become more proactive but also more analytical in their decision-making processes.

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Additionally, teaching students how to manage their money from an early age provides them with a safe space to make mistakes and learn from them before venturing into the real-world environment, thereby curbing the power of a future filled with financial mistakes.

The financial know-how

Using financial literacy as a vehicle to teach children vital lessons will provide opportunities for their guardians to educate them about the importance of supporting local communities and always finding ways to contribute to the well-being of marginalized communities.

An excellent example of promoting financial literacy could be ‘experiential learning’. Using this technique, children can be inspired to role-play where they act as a customer and practice with family members how to quickly set up their remaining expenses while “shopping”.

This blended learning approach also helps students explore different types of earning opportunities, encouraging them to explore a range of streams they may be interested in. Besides, the learning outcomes will familiarize the students with the tax system, further helping them to grow up to be responsible citizens.

Therefore, financial education can make a huge difference by empowering young people to build financial stability and contribute to society’s economic growth. Needless to say, investing in this empowering knowledge in the early years will prepare the child to maintain healthy financial well-being throughout their lives.

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