Children’s Day 2024: How To Teach Financial Literacy To Students From An Early Age – News18
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Children’s Day 2024: The prevalence of technology and the increasing number of frauds due to lack of awareness is another thing that parents should make their young wards aware of, believe experts
Schools should indeed hold special classes focused on financial literacy, say experts (File Photo)
Today, on the occasion of Children’s Day, experts emphasise the importance of instilling financial literacy in young minds. Teaching children responsible money management at an early age not only helps them make informed financial decisions but also contributes to their long-term stability and success.
Children must be encouraged to learn responsible financial behaviour at an early stage, say experts. “As per a survey, 76 per cent of the Indian population are financially illiterate,” says Manoj Kumar MN, Physics Teacher, 90+ My Tuition App. Introducing financial concepts like budgeting, saving, and investing helps children develop good money management habits and enhance their overall financial stability and economic growth of the country, Kumar adds.
Financial education among students teaches them to develop responsible and informed spending and saving habits, thereby reducing the chances of unnecessary debts and financial mismanagement in the future. “In India, teaching financial literacy helps bridge the gap between economic classes and equip students for a secure future,” says Husien Dohadwalla, Co- CEO of Crimson Schools.
Sugandha Jain, Associate Technical Director, Athena Knowledge Center, Athena Education. says that according to a survey by S&P, “only 24 per cent of India’s population is financially literate, one of the lowest rates globally. This lack of financial knowledge can lead to poor financial decisions, which may have long-term consequences for individuals and families.”
The Practical Approach
One of the best ways to teach children is through a practical approach, says Jain. Parents can start by giving children a small allowance as it allows them to make decisions about spending and saving. “For example, if a child receives Rs 100 per week, they could be encouraged to save Rs 50 for something special while spending the rest on small treats or toys,” says Jain.
Parents can start teaching children about money at around 6-7 years of age, using simple concepts like saving, spending, and sharing, says Dohadwalla. “Parents can start teaching children about money by discussing everyday experiences, encouraging saving and budgeting. Allocating allowances for needs and wants can be a good starting point,” he adds.
To begin with, children need to understand basic concepts like:
Identifying Coins and Bills: Recognising different types of money and understanding their value.
Simple Transactions: Learning about buying and selling through play, such as using dummy money in a toy store.
Saving: Introducing the idea of saving money in a piggy bank for something they want.
“As the children grow older, parents can introduce complex financial concepts. Starting at an early age and building on these concepts help children develop strong financial habits that will benefit them throughout their lives,” says Kumar.
“Tiny drops make a mighty ocean. Encouraging kids to save in the old piggy bank style never goes out of fashion. Little incentives in the form of a few pennies in those banks when they work or run errands can be an encouragement,” says Bharathi Lakshmi, Principal of Hindustan International School, Chennai.
“It is often noticed that kids learn best by emulation and listening to the family on their savings can surely benefit their financial literacy. The money saved in a year can be used for a well-deserved holiday or a noble cause. Kids learn best with practice,” says Lakshmi.
However, the prevalence of technology and the increasing number of frauds due to lack of awareness is another thing that parents should make their young wards aware of, says Anju Soni, Principal, Shiv Nadar School, Noida. “Too much information overload, without proper scaffolding, may also lead to issues. Hence, parents should be vigilant and only share age-appropriate information regarding money with young children,” she adds.
Should Schools Conduct Special Classes?
Schools should indeed hold special classes focused on financial literacy, says Jain. Schools are required to have a structured curriculum to provide foundational knowledge to children in managing finances effectively. “Incorporating financial literacy into school curricula not only prepares students for personal financial management but also empowers them to make informed decisions that affect their futures. For example, programmes like the Financial Education Training Programme (FETP) train teachers to deliver financial education effectively in classrooms across India,” adds Jain.
“Special classes dedicated to financial literacy can be highly beneficial. These classes can cover various topics, such as banking, investments, and economic principles, providing practical knowledge that students will use throughout their lives,” says Sanamdeep Chadha, Education Reformist and Director of Genesis Global School, Noida. Integrating financial education into the school system can ensure that all students are equipped with the skills necessary for financial independence and informed decision-making in their future, she adds.
“Financial Literacy is one of the skill subjects offered from Class 6 onwards in CBSE schools. In Classes 9 to 12, students can opt for the Financial Markets (FMM) course as the Optional subject. This course exposes them to the relevant concepts on money management, equity markets, mutual funds and related taxation laws/guidelines, etc.,” says Dohadwalla.
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