The Missing Subject in School- Managing personal finances

By- Araina Nangalia

Why Financial Literacy Matters

Imagine, graduating high school with flying colours but still struggling with managing your money, understanding taxes and limiting expenditure. The importance of financial skills are the most important part of becoming an adult, something that is not taught in school, rather not taught at all. From buying your first device on EMI or avoiding stocking up rent, electricity bills; real life decisions demand financial awareness. Without basic money management skills, they’re left to learn through costly mistakes.This blog explores why financial literacy is essential in school curriculums and how it can shape smarter, more independent citizens.

What is Financial Literacy?

Coming to the basic question, what is financial literacy? It’s a basic phenomena where a person develops knowledge and skills related to budgeting, saving money, interest on loans and all the other core concepts of ways to manage personal finances. The five key elements of financial literacy are earn, save and invest, protect, spend and borrow and manage debt. People often believe that financial literacy is only applicable to adults. While it is most important for them, it is also crucial for teenagers and young adults to build on this skill. This is something that isn’t taught in classes, not written in books, but is learnt through experiences.

Why Schools Don’t Teach Money Management

Even in the 21st century, most schools continue to focus on rigorous traditional subjects such as math, science, and even literature, skipping over financial literacy. For instance, students may be able to figure out compound interest in class but understanding how interest works on a credit card or personal loan is never taught. A study conducted in 2023 by The National Centre For Financial Education showed that approximately 75% of Indian students aged 14-18 felt unequipped to manage basic finance skills like budgeting and filing taxes. Young adults, out of school, often become debt-burdened, over-spend using credit, or succumbing to online financial scams. With good qualifications, many students enter the job market, only to find themselves devoid of the knowledge of savings, insurance, or investments; leaving them financially vulnerable. The inability to not understand matters of budgeting and saving isn’t the only reason, the lack of financial education inflicts the entire nation in a dire state of mental well-being in regard to the economy.

How Schools Can Teach Financial Skills

Schools can take basic steps to incorporate teaching how to manage personal finances. It can be introduced as 30 minute sessions every week with a blend of economics and mathematics. Teachers and advisors can use the monopoly concept to integrate the concept of real life economic decisions using fake money.  Digital simulations, apps for virtual finance management are a great way of adding some fun and creativity. Field trips to banks, guest speaker lessons with entrepreneurs, financial advisors, etc would add credibility to this programme.

Building Smarter, Independent Citizens

In today’s world, gaining the skills of finance management is just as crucial as academic success. Schools and colleges have the responsibility to prepare students for facing real life- not just exams. By including this in the curriculum, it would avoid students drowning in debt and would aid them while making large financial decisions. It would shape the leaders of tomorrow into more responsible and aware citizens. 

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This article is published by Bookosmia, India’s #1 publisher for and by young people. Bookosmia publishes stories, books, podcasts, events, TED-Ed talks, workshops, bedtime stories and more related to kids and young adults.

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