Financial literacy is essential to life as it helps us make crucial financial decisions. It is the ability to understand, manage and use money effectively. It helps us make informed decisions about our finances, save for a rainy day and cope with debt.
Financial literacy is more than figuring out how much you need to pay each month for housing expenses, how much your child will need for college tuition or how to cut costs. It involves a holistic view of the economy as well as saving, investing, and spending strategies. This is why every child should be taught financial literacy at a young age. Institutions like 21K School have developed a curriculum that teaches children about these skills encouragingly and practically.
Why should schools be teaching financial literacy to our children?
There are many reasons why schools should be teaching financial literacy to our children. Our children must learn how to manage their money, cut costs, build financial savings, invest, and build a nest for their future. They should also know how to budget and discipline themselves to manage their spending habits.
This should be done at a young age because they will be able to learn from mistakes made during this period, which will not have any severe consequences but will help them grow into successful and financially secure adults.
Develop better judgements
Financial literacy will help children develop better judgement about what kind of things are vital financially. It will also help avoid building up unnecessary debt by giving a framework for anticipating how much they’ll need when they get older and why putting aside some money for financial savings is essential.
Learn how money works in the real world
While there are many methods to help your children develop financial skills, practical application is one of the best ways. You can start by teaching them how to cut costs and how money works in the real world. This means getting them involved in saving, spending and investing as early as possible.
Financial literacy is a valuable skill to have, but it’s not something that can be learned overnight. Students need to start learning about money as soon as they enter school. They need to be taught how to save, how to spend and how to make good financial decisions.
The earlier children are exposed to these skills, the better. It’s important for children to learn how their money works from an early age because this will help them develop habits that last well into adulthood. When children learn about financial literacy in school, they’re also able to see themselves as role models for the next generation of workers who may one day follow in their footsteps by working in the financial sector or business themselves.
How to cut cost
We need to teach our children the importance of financial literacy. They should be aware of the impact it makes in their lives. An essential part of this is to comprehend the direct relationship between desires and money management. Managing desires and understanding the difference between necessity and indulgence is a skill that should be developed in the formative years. This will effectively help in addressing cost-cutting at its very foundation.
Develop saving habits
Inculcate the habit of saving in your child. You can help them by setting up a financial savings account at their local bank or credit union and even give them a debit card to use for purchases.
Helps to become self-sufficient
Learning how to manage finances early in life will help them become self-sufficient when they grow older. When you are a child, parents teach you the basics of money management by giving allowance to buy certain things that they want you to buy at the shops or buy with cash. But as an adult, parents no longer give their children allowance because they know better about money management now.
This means that children must learn all about saving for future needs and paying bills on time without depending on others for funds. Financial literacy helps children develop a sense of responsibility towards their future selves (and parents).
When it comes to your children’s financial literacy, the earlier you can start, the better. You don’t want them to struggle with their student loans and credit card payments later on in life.
The truth is, whether you’re paying for your kids’ college tuition or not, they’ll eventually need a degree so they can get a good job and start contributing to society. So if you can teach them now about how money works, they’ll be ready when they’re older.
By teaching your children about money from a young age, you will help them develop an understanding of how the world works and give them a head start in life. It could even save them some money down the road by giving them an advantage when it comes time for college or any other major purchase or investment.
Benefits of financial literacy
Financial literacy is more than just knowing how much money a specific expense costs; it includes understanding how money works, how debt works, and how to budget effectively and stay focused on the long-term goals you set for yourself and your family.
The benefits of financial literacy for children are numerous. They will not only learn how to manage their money but also be better able to understand the importance of building financial savings and investing. They will also have a better chance of getting a job after graduation, which is important because unemployment is at an all-time high.
Financially literate children are likelier to have higher grades, less debt and a lower likelihood of incarceration. This is because they can think critically about their finances and make sound decisions based on those thoughts.
Here are some other benefits of financial literacy:
- Allows people to budget for purchases, saving, and investing.
- It helps people create a secure retirement savings plan.
- It helps people understand how credit works.
- It helps people develop better credit scores by managing their spending habits.
Financial literacy and online schooling in India
Online schooling in India has made it easier for students to access education. It is also clear that this has opened up a new world of learning opportunities. But what about financial literacy?
Certain schools have incorporated financial literacy in their online schooling curriculums. This includes 21K School which uses online lessons to provide basic financial knowledge through interactive games and quizzes. They encourage students to volunteer with organisations at their local community banks or credit unions, where they can learn more about credit history, loans and other financial services available in these institutions.
Financial literacy is the ability to understand and use financial information. It’s about understanding how money works and how to manage it. It’s about building skills that will help you make better decisions in your life, whether it’s buying a car or signing up for a credit card. It is essential to understand why it is crucial and should be taught in schools.
Financial literacy can be taught in the classroom, but it requires an effective curriculum with modes of practical learning. Online schools in India, especially ones like 21K School, have started to achieve this feat and teach children financial literacy early.