Should we Teach Financial Literacy in Schools?

What is the Law of Gravity? We all know but many of us are ignorant about terms like credit score, taxes, compound interest. In our world today where money plays such a vital role in our everyday life and dictates our lifestyle choices and our well-being as well, children should learn about financial literacy so that they are ready to take on the world. It should be a core subject. It is time we change our mindsets and adopt to the ways and issues that govern our life.

What is Financial Literacy? 

Financial Literacy means knowing about monetary matters and having the skill to manage your money responsibility. So, the term includes notions like:

• Budgeting and Saving

• Understanding Credit and Debt

• Investing and Compound Interest

• Paying taxes and bills on time

• Avoiding Scams and Irregularities 

• Planning for short and long-term goals

It is not about learning or teaching numbers -it is also about making life smart, and taking informed decisions and achieving financial independence and security. 

Some Realities about the World Today

Teens today are growing up in a world where finances play a significant role around them but unfortunately, they know little about it and hence are completely unprepared for the adult world.

1. Students do not the basics of Budgeting 

Many teens today do not know how to open band accounts or to how to apply for loan. They are so unprepared for the world

2. The Rise of Digital Spending and Credit Traps

With UPI apps, credit cards and online loans all around them, money is an ever-present virtual reality. It becomes imperative that they should know about these realities before they fall into digital traps. They are likely to fall into digital debts if they are not warned or educated about the same.

3. Student Loans and Education Debts

Many students take educational loans for college education but do not know how the process of repayment works so it is necessary that they know about this. Or they will struggle with debts and loan repayment later on in life. Financial Literacy becomes absolutely necessary.

4. Economic Inequality Worsens Without Education

Informed financial decisions can bridge the gap between generations. Without access to this knowledge, many youngsters might remain stuck in cycles of poverty and financial debts.

Why Financial Literacy Matters

1. It Builds Confidence

Teens who understand money make smarter choices- from saving gift money to choosing part-time jobs or being smart about their expenses.

2. It Prevents Debts

Knowing how loans, interest, and credit cards work helps students to avoid financial traps before they start.

3. It Encourages Saving and Investing Early

Understanding compound interest and the value of time empowers teens to start saving and investing earlier, building long-term wealth.

4. It Supports Mental Health

Financial stress is one of the leading causes of anxiety among young adults. Learning to manage money reduces future stress.

5. It Empowers Independence

Financial literacy gives young people the power to make independent choices- from paying rent to starting a business. 

Why Financial Literacy Should be Mandatory in High Schools 

Students will be empowered with skills such as

• How to create a monthly budget

• The difference between a debit card and a credit card

• What a credit score is and how it works

• How to calculate interest on a loan

• The basics of stock markets, insurance, and taxes 

• How to evaluate job offers based on salary and monetary benefits

A generation of smart will be ready who will be equipped to live well

Financial Literacy should be 

• Mandatory: Like math, science or language

• Practical: Tied to real-world scenarios and simulations 

• Inclusive: Relevant to all income levels and backgrounds

• Ongoing: A Continuous process reinforced year after year, not in one short module or session

What are the Other Countries Doing:

• Australia includes financial literacy in its national curriculum 

• Canada too imparts mandatory financial education in multiple provinces

• Finland Integrates it into their subjects and curriculum

• In India, the CBSE and state level boards are introducing these concepts into their curriculum, though the process is slow. 

Steps Schools can Take Right Now

• Create Personal Finance clubs to trigger interest in the students

• Use apps like Kahoot, Quizizz and Google Sheets to teach budgeting 

• Collaborate with banks or fintech companies to introduce these concepts into the young minds

• Simulate real-life scenarios eg budgeting for college education, planning a vacation

• Encourage projects like “Plan a Dream Life” etc 

To conclude, money is a significant part of our life and learning the skills to manage should not be confined to a few but must include everyone so that it is a life skill. Schools must without fail teach financial literacy in various ways. School time is the best time to learn- when habits are forming and futures will be shaped. Making financial literacy mandatory across the world will prepare our children to survive in a constantly changing world.