Financial literacy is the ability to use skills and knowledge to manage monetary resources efficiently for a lifetime of economic prosperity. The OECD defines financial literacy as a mix of financial behaviours, attitudes, skills, knowledge, and awareness needed to make sound financial decisions and accomplish individual economic welfare.
As per a study conducted by the National Centre for Financial Education in 2019, only 29% of Indians are financially literate. Among the BRIC countries, financial literacy in India is the least. Also, a study by Standard and Poor suggests that most consumers lack a general understanding of compound interest, credit, and other vital concepts.
Importance Of Financial Literacy Among Children
Most parents are in the habit of gifting their children piggy banks to save cash prizes or birthday money from relatives and friends, and this concept aids them in keeping up a discipline of saving.
However, financial markets are complicated and much more intricate than this mere concept of saving. If children understand the concept of financial markets as per their age, this can aid their future investing in proper financial instruments.
When children become financially literate, they can influence their families by sharing the importance and knowledge of savings and taking needed steps for superior money management. Financial literacy can be promoted when students take the commerce stream and attend the best commerce classes, either by UKIC offline or UKIC online.
Where Can Children Be Financially Active?
You can open several financial schemes and products for children under parents’ guardianship. Opening a savings account for your kid will enable them to understand the value of not only savings but also investment. One can open PPF or Public Provident Fund as a guardian for as little as Rs. 100. When kids become adults, they can operate such accounts independently.
Though the PPF account is for 15 years, you can extend it indefinitely after a block of 15 years. Once kids become adults, they can operate this account on their own.
You can open a Sukanya Samridhi Yojana account for a girl below ten years, and once she becomes ten, she can operate the account independently. Even by investing through SIP (Systematic Investment Plan), kids can learn about saving and investment rather than through a piggy bank. You can also select several other financial products per your family’s needs.
When one invests in a child-friendly scheme, the child learns to be financially responsible. As a parent, one must discuss the details of such schemes with the child. Make them understand how savings and investment can go a long way to aid them in buying their dream toys like Play Station or Bicycle. Students in the commerce stream can better understand such nitty-gritty of saving and investment schemes and become financially literate by studying economics, accounts, and business studies. Commerce classes in Ahmedabad can help them become financially literate in no time.
How To Teach Financial Literacy?
Though professionals like doctors and engineers are experts in their fields, they fail at personal finance. Students who attend the best commerce classes delivered by UKIC online learn the complexities of financial markets right from high school.
Institutions like NCFE (National Centre of Financial Education) run flagship training programs in schools, and this has resulted in defining 150 schools in India as ‘Money Smart’ schools. As per this program, schools are offered modes to impart financial education through their teacher’s training and student workbooks.
The NSE (National Stock Exchange) provides Financial Education programs in more than 4000 schools in six states such as Punjab, Tamil Nadu, Goa, Himachal Pradesh, Gujarat, and Nagaland.
The CBSE also provides courses like Insurance, Banking, Management, and Financial markets at the senior-secondary levels. Commerce classes teach the CBSE curriculum in Ahmedabad. You can train your children in financial literacy by enrolling them in offline and online courses around the country.
As per studies, commerce students displayed higher financial knowledge levels than Arts and Science stream students. However, courses are recommended to train the latter in personal finance management, focusing on enhancing financial planning and knowledge.
The Circumstances In India
Studies have found that the financial literacy of Indian high school students is lower than that in developed countries. Gender differences were identified, with females outscoring males, as opposed to findings in developed countries.
Students who pursued the economics commerce stream were found to have higher financial literacy levels than those in the science stream. However, students with high numeracy skills could not transfer such skills to financial computations. But, parental involvement impacted financial literacy much more.
Such findings supported high school financial education with parental involvement and stressed practical macro-economic impact and hands-on application to enhance financial literacy.
Statistics show the need for financial education improvement among all age groups in India. The reality is that there are not enough high school programs on financial literacy for students. Experts recommend that it is a must to include financial literacy in all levels of the school curriculum, and it enables students to make better financial decisions as adults.
In sum, these are why the commerce stream of high school education offers better training in financial literacy skills.