The process of imparting financial management education can be started when toddlers first learn how to count by the Parents and guardians who are the primary educators.
By Daviender Narang
Financial management is an art of handling financial situations in a responsible manner to achieve financial independence. The National Centre for Financial Education in 2019 conducted a survey and said that only 27 per cent of Indians are financially literate. Financial experts agree that while people have much more money today than they did generations ago, the amount of knowledge on how to manage that money hasn’t kept pace. This leads to a notion that the art of managing money should be taught to every child. It is important to develop a thorough understanding of financial literacy at an early age, to ensure proper money management skills later in life.
The Organisation for Economic Co-operation and Development (OECD) defines Financial Literacy as a combination of financial awareness, knowledge, skills, attitude, and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being. Elementary school is a fantastic time to teach children the importance and value of earning and saving money. The financial management education in schools can help children developing money management skills which will allow for a strong foundation of lasting financial competence. The process of imparting financial management education can be started when toddlers first learn how to count by the Parents and guardians who are the primary educators.
Schools play a vital role in making the children financially literate by introducing some basic conceptual programmes from entry level to high school education. Unless students in the school are given the right opportunity right from high school, they too are destined to face challenging times financially. A financial planning class as part of their school curriculum at an early age could drastically improve their knowledge some if not all of the financial products available for saving money while also ensuring that when these kids turn into adults, they have an increased familiarity with matters of financial importance. The integration of financial knowledge into existing curriculum and to make learning more relevant as the students will be able to:
Develop an understanding of spending and saving fosters a desire to save money among students. Further it encourages students to use a budget when they need to decide how much money to save and spend.
Learn about saving money, setting savings goals, opportunity cost, and segregation, as well as investigating what it takes to reach a savings goal.
Children will be far more capable of making critical financial decisions while also knowing how money works for the duration of their adult lives.
Ability to calculate returns from the money invested through simple and compound interest calculations.
Introducing financial education at an early age and continuing it throughout the school education will help in creating financially literate individuals leading to shaping our country’s future citizens into a financial-savvy population which, in turn, will empower them to make rational financial decisions.
When children are aware of the financial management concepts, they can influence their families by sharing the knowledge on importance of savings and take necessary steps to better manage their money. Thus, spreading the concept of financial literacy in the school education and creating financial awareness among school children can be a great help.
Hence it is crucial that financial education is introduced right from the grassroots level as it’s undoubtedly an essential life skill.
The author is professor, director at Jaipuria Institute of Management, Ghaziabad. Views are personal.
Source Link: financialexpress.com
