Importance of Teaching Financial Literacy in the Schools

 

Financial literacy is necessary for making good financial decisions which lead to financial independence. Despite its great importance, financial education is often ignored in our schools and colleges, which leads to the deficiency of financial skills and education in youth. This article explores the need of including financial literacy into school curriculums.

Financial literacy is making smart financial choices, which helps a person achieve financial goals and live the life as they want with worrying about the money. The main reason for wrong financial decisions is that financial education isn't taught as a subject in the schools, colleges, or even in the universities. Nowadays, it is essential to teach about financial literacy. In order to be financially literate person, there are multiple ways to educate oneself about finances and financial management. One can take advantage of platforms like YouTube, Blogs, and Social Media handles.

The best way to educate about financial literacy is to practice it in daily life. Just make a budget and manage it. Do the calculations about from where the money came, where it went, and how much money is left. This activity will provide a lot of help in understanding how finance/money is managed.

"The importance of teaching financial literacy in schools"

It is significant for everyone to learn about financial literacy and money management. Especially for the children and teenagers, it is beneficial for them to know about financial management at the start of their careers. In order to raise awareness of financial education among children, Schools and Parents should start teaching them about money management at home and at schools. The main problem that we are facing right now is that we aren't taught about finances at an early age. When a person is in his/her teenage years, they realize how important it is for them to have the knowledge about money management. Hence, it is very important to educate our children in schools about financial literacy and money management, so that they are able to manage their money properly. Financial literacy is all about understanding how to manage, save, and invest money.

Teaching these skills in schools is important for many reasons some of them are as follows:

1. Being Financially Independent: Learning about money management and Financial Literacy in school will help students become financially independent in future by managing their money wisely.

2. Not making Financial Mistakes: Without appropriate financial education, many teenagers are making financial mistakes like getting into debt and buying liabilities or luxury items they do not need. Teaching financial literacy in schools can help students avoid these mistakes and make smart decisions while spending their money.

3. Supporting the Economic Stability: When people make good financial decisions, it strengthens the economy and makes it stable leading to prosperity of whole country.

4. Empowering Students: Financial Education gives students the skill to manage and utilize their own money. They learn to make good decisions, which reduce financial mistakes and help them achieve their financial goals.

5. Boosting Smart Spending: Financially educated students make better choices when it comes to spending and saving the money. They are less likely to fall for scams and other frauds and will spend the money wisely.

6 rules of financial literacy 

1. Have a budget. 

The process of making a spending plan is called a budget. Having a budget plan helps you make financial decisions in the future. However, a budget is often created and reevaluated daily. Knowing where your money goes is the main vision of the budget. It helps to make wise decisions. Having an idea about where the money goes and how much money is left. It helps in making the right decisions in the future by keeping in mind the actual bank balance that is left. 

2. Stop spending your pay and start saving. 

 Millionaires don't become millions by spending much money; they spend a humble life. People who drive fancy cars and spend the extra money become bankrupt after a certain time because they focus more on spending than earning. Try to save a certain amount of money at the end of every month.

Either keep that money as savings or invest it. 

3. Set financial goals.

Setting financial goals and achieving them is very difficult task, but it is compulsory to make small milestones and achieve them. Start with Short-term goals as they are easy to achieve; however, long-term goals can take up to 5 or 10 years. 

4. Learn to clear your debt. 

Many people are stuck in debt, and they make it a part of their financial plan, like student loans or debt cards. Cleaning debt means clearing your debt and not taking any loans again. Maintain the use of money and avoid using credit cards when they are not needed. 

5. Reserve some cash in an emergency fund. 

Cash reserved for emergencies is referred to as an emergency fund. It could be for repairing Car, Home, or medical expenses. After all the other expenses, the savings are done in a certain period in which a specific amount should be saved for emergencies so that the use of the debit card or any loan should be avoided. If any loan is taken, then 5% or 10% minimum interest will be paid, and there will be no chance to continue making savings.

6. Invest your money. 

Any person who puts money in financial schemes for achieving profits is known as an investor. there are different types of investments. Some of them take less risk in investment, and others take more risk. You can invest your money in bonds, stocks, gold, real state etc.