“Students do not need to think about money, they should focus on studying” – if you think like that, you are not alone. But you may want to reconsider this line of thought. In India, the financial literacy rate is only 35%, which means a huge chunk of our population does not have the necessary tools or knowledge to manage their money well.
Financial knowledge is a highly valuable skill with huge real-life implications. It is an underrated subject often skipped in favour of more traditional ones. However, with the world rapidly moving towards a more dynamic economy, can you ignore the importance of financial literacy for your child? Read this blog to learn about the importance of financial literacy for students.
What is Financial Education?
Financial education is the process through which an individual achieves financial knowledge. It is a way to instil financial literacy skills in the students so they can acquire the skills and knowledge necessary to understand and manage money.
Financial literacy programsare curated with the aim of enabling individuals to make informed decisions regarding their finances. They focus on financial literacy for students so they can understand the value of money in the context of the global economy from a young age. A lot of CBSE international schools in Hyderabad are introducing such programs to arm the next generation with financial literacy.
Benefits of Financial Literacy for Students
With the rising cost of living and inflation, financial literacy skills are essential to live a secure, comfortable life. Here are the key benefits of financial literacy and why you should invest your child’s time in it.
- Better Money Management – Financial knowledge enables one to differentiate between needs and wants. This enables smart money management and prevents frivolous spending.
- Prepares for Real-World Challenges – Financial literacy skills do not have an expiry date. Once students learn them, they will serve them for a lifetime in ensuring they tackle money challenges smartly.
- Encourages Smart Investments – Understanding markets and calculating risks and returns are essential skills that help students make prudent investment choices.
- Reduces Financial Stress in Adulthood – 69% of Indian households struggle with financial stress. Financial literacy skills can help reduce this stress by facilitating proper money management.
Key Components of Financial Education
The importance of Financial Literacy cannot be understated. The best international schools in Hyderabad focus on enhancing financial knowledge by teaching students these essential skills.
- Budgeting and Expense Tracking – Students should be taught about budgeting techniques like 50/20/30, pay-yourself-first budgeting, zero-budgeting, etc., to learn how to manage their income and expenses.
- Saving and Emergency Funds – Understanding how to save and create emergency funds is an essential part of financial education. Students should be taught about saving and maintaining a 6-month emergency fund for rainy days.
- Understanding Credit and Debt Management – Students should be given an overview of credit scores and debt management so they can start building their credit history to benefit them in the future.
- Introduction to Investing – Students should be taught about different types of investing and the various ways in which they can calculate risks, returns and plan for future retirement.
Bottom Line
Financial literacy for students is the need of the hour. It is important for students to understand money management from a young age so they do not end up confused and scared when they grow up. For parents, when you are looking for schools for your child, look for institutions with financial literacy in their curriculum.
At Glendale, one of the top international schools in Hyderabad, we also focus on the financial development of the student, in addition to other aspects. We equip your child with all the necessary skills to become a successful adult. So, contact us to know more about our admission in higher secondary classes!