Why is it essential to teach financial management in schools
A renowned strategist, Mac Duke, defines financial education as “more valuable than money”. One thing people don’t learn early enough is how to manage money. Financial literacy helps students develop strong financial habits early in life and avoids many mistakes that lead to lifelong financial struggles. While schools teach many subjects that help us become well-rounded individuals, this leaves out one of the most crucial topics of financial literacy.
Like reading and writing, money management is a skill. No one is born with the innate ability to manage money, but teaching this subject in school can equip children with skills they wouldn’t otherwise learn at home. Financial discipline is the key to financial success. Money management lessons are important for building wealth and meeting major life goals. But unfortunately, our current educational system has failed to impart financial discipline to children.
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A study shows that 53% of adults are financially anxious. The National Bureau of Economic Research reports that 40.2% of adults with low levels of financial literacy relied on parents, friends and acquaintances as their main source of financial knowledge.
Teaching children financial skills before they enter college or the workforce helps them grow into adults who can achieve financial security and success. If children learn the simple principle that “it is wise to save for the future,” they begin to develop stronger critical thinking skills about money and finances.
In the words of Vince Shorb, CEO of the National Financial Educators Council, USA, “College graduates spend 16 years learning skills that will help them earn a higher salary, but little or no time is spent on them. help them save, invest and grow their money.”
start at home
Money basics should start at home, so parents are always advised to involve children in money matters and teach them small finance lessons at home first. Making family budgets and involving children in them will help them learn their budgeting lessons. Exposing them to a real situation will help a lot, which can encourage them to achieve both short-term and long-term financial goals.
Parents can encourage their children to put money in four pockets: one for education savings, the second for games and fun, the third for the holidays, and the fourth for future savings that will help them to plan their expenses. Kids these days are fast learners and tech-savvy, so it’s easy for you to teach them financial discipline. Teaching children about digital money can also help them make informed financial decisions.
Importance of Teaching Financial Literacy in Schools
It is important to be actively involved in preparing children for the financial world. Adding subjects such as financial literacy to the curriculum can add value to the lives of Gen S children. Like other subjects such as science or history, financial literacy can be taught to students in schools and the emphasis should be on giving students practical exposure so that they can use their financial management skills.
Training teachers in personal finance and offering them incentives to teach it in their classrooms can boost the whole process. Financial independence means knowing the skills to spend, save, and invest the way you want. In Western countries, children are encouraged to save money and deposit it in banks.
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Financial education helps you at different stages of life. During childhood, it helps you understand the value of money and the importance of saving. The best age to develop savings habits in children is 7 to 10 years old. From an early age, this education helps to achieve financial goals and finally, in adulthood, it helps to make good investment decisions in the financial environment.
Financial literacy can help students become independent and give them basic knowledge about investment options, budgeting, credit, savings, taxes, financial markets, and more. Teaching financial literacy at the school level can prepare them for the future, prepare them for emergencies, and stay on track with their long-term financial planning. Small amounts saved daily become huge investments in the future and the ability to manage money means the individual is better prepared for life and can make better investment decisions for a big future.
— Written by Ankit Gera, Co-Founder, Junio
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