The need for financial literacy among youngsters cannot be overstated. Though it is important for people of all ages, it is all the more imperative for the younger generation. The availability of complex financial products in the market and the growth of technology have resulted in global connectedness and massive changes in financial transactions, which in turn has greatly influenced consumer behaviour and social interaction. To cite an example online shopping is today an easy temptation that digital denizens easily give in to. Coupled with the ready availability of credit cards, this can make people irresponsible and make them spend more than they earn and make them run into debt. Thus, the present generation faces more financial risks, and would need to make difficult financial decisions once they attain adulthood.

In the context of school, financial learning refers to being equipped with the right financial concepts, skills and aptitude. Banking concepts like loans, installments, retirement policies, and budget, form part of financial education in a broad way.

Financial literacy can make a difference as students need to learn how to manage their debts and save up for a ‘rainy’ day. It could help kids realise the difference between wants and needs. Moreover, there is a direct correlation between economic well-being and prosperity. Poor financial literacy has been associated with decreased physical well-being and low standards of living.

Why should it be a part of school education?
A school curriculum spans over several years starting from kindergarten to higher secondary level. This provides an opportunity to inculcate sound financial behaviour among students especially in a scenario when parents are ill-equipped to do so.

The cognitive abilities of a child start developing at a very early age, i.e, when they start going to school. Children of this age usually learn by ‘doing’. Therefore,comics and money games can be helpful in teaching the concepts of financial literacy to them.

The reasoning capacity and logical thinking

skills of students start developing when they are in the secondary and higher secondary classes. The drive for independence and self-reliance makes them impulsive spenders and financial education in this age will help inculcate money management skills in them.

The drive for independence and self-reliance makes them impulsive spenders and financial education in this age will help inculcate money management skills in them

There is a debate happening in various quarters whether financial literacy can be integrated with other subjects like mathematics, social science, economics, so as to have a more interdisciplinary approach, or whether it should be introduced as an independent subject altogether. Although debates are always welcome, it should not delay the full-fledged introduction of financial literacy in schools.

Initiatives taken so far
In 2010, the Reserve Bank of India (RBI) initiated a project with the motive of disseminating information about the functions of RBI and general banking concepts to various groups including school goers. Teachers can encourage students to visit RBI website and download two comic books on the RBI website. They can also browse through all the resources including games that have been particularly designed to impart financial literacy to students of grade six onwards.

In 2013, the Organisation for Economic Co-operation and Development (OECD) started an intergovernmental project with the aim of improving standards of financial literacy through the development of literacy principles.

Possible Initiatives
The idea of finance as a stand alone subject in secondary education is still at its nascent stage. Meanwhile, schools can organise financial literacy camps during vacations and impart relevant lessons. Another way to raise awareness among students is to encourage them to open bank accounts. Parents can deposit pocket money in these accounts and encourage their wards to build up a habit of saving. This can help students acquaint themselves with basic banking transactions such as deposit and withdrawal of money, percentage of interest earned, etc. Parents can inculcate good financial habits at home with the aid of the tried and tested ‘three jars’ method. Three jars can be labelled as spending, saving and investment, and whenever the kid earns money after completing an assigned task, it would be left to their discretion to decide how to use the money. This way, they would be able to understand that money is a limited resource and should be spent wisely. They would also learn that investing money increases money.

In India, children receive a lot more support from their parents with regard to financing their higher education than in some of the developed countries. This keeps an Indian teenager dependent on their parents for a longer time. Thus, just including a chapter on banking in maths curriculum will not help students gain financial literacy.

In recent times, we have witnessed the Indian Government trying to encourage saving habits among Indian citizens. And has been largely successful in doing so. However, those saving habits have not been translated into investments. With the inclusion of financial literacy skills early in schools, we can expect a positive change in this regard.