Financial Literacy for students of Grades 6 to 12 being introduced in Prerana Waldorf School in the academic year 2023-24

We live in a world where financial decisions are becoming increasingly complex. People need a wide range of skills and knowledge to make informed choices and to manage the risks involved.

Financial literacy is a core life skill for participating in modern society. Children are growing up in an increasingly complex world where they will eventually need to take charge of their own financial future. Building it, into curriculum from an early age allows children to acquire the knowledge and skills to build responsible financial behaviour.

It is very apparent that people who are less versed in financial literacy go through tougher financial times, and our aim to introduce financial literacy, is to mitigate that. “One of the reasons the rich get richer, the poor get poorer and the middle class struggles in debt is because, the subject of money is taught at home, not at school.” says Robert Kiyosaki, Educationist.

We believe that learning financial literacy from a young age is an essential life skill as there is no benefit in making money, if it’s not being spent in the right places. Financial awareness can change one’s perception and understanding of the true workings of spending money. It is certainly no more an adult topic. Financial literacy refers to the ability to understand and apply financial concepts and abilities in our daily life.

Instilling financial literacy should ideally begin at an early age and continue ultimately to financial planning, in order to reap rewards. Currently, owing to a lack of financial literacy, the general public is caught unaware about money matters even as basic as income, saving, and spending concepts. Introducing financial education at an early age and continuing it throughout the course of their education helps in creating an opportunity to shape our country’s future citizens into a financial-savvy population which, in turn, will empower them to make rational financial decisions. Thus, by equipping them with the right skills, children will be far more capable of making critical financial decisions while also knowing how money works for the duration of their adult lives. Emphasising the importance of financial literacy from an early age will also encourage students to develop healthier attitudes about money, save and spend thoughtfully.

We are going to introduce financial literacy program for classes from 6th to 10th. Let’s understand what might be included in this new financial literacy framework.

New Educational Policy 2020 and RBI’s financial literacy framework developed for schools, most of the states have accepted to include financial literacy in their curriculum. It is a huge step to expand financial literacy in India starting with young minds in school.

Financial literacy is to help students in the following ways:

  1. Manage money – Income, Expenses, and Budgeting – In this module, students will be taught about needs and wants. They’ll also learn about managing their expenses and how to cut down on unnecessary expenses. Another important concept that will be taught is budgeting.
  2. Saving – Saving is extremely important as it helps to meet goals and will be useful in the future. Students will learn how to save their money for short-term, medium-term, and long-term goals.
  3. Introduction to Banking – Here the students will learn how the banking system works and various types of accounts offered to them like- Savings account, Current account, Recurring Deposits, Fixed Deposits. To teach students how to open and operate a bank account in a simulated environment. Alongside, how to manage their own investment portfolios so that they don’t feel lost when the time comes to make real-world financial decisions.
  4. Basics of Insurance, and Pension, basics of investment like the stock market, mutual funds, etc.
  5. Education Loan – An education loan is a great way to cover study costs. Learning about student loans will give students some insights into how a loan works.
  6. Financial Sector Regulators – Every financial institution is regulated by some authorities. Students will be taught about these regulatory bodies and how they work. Understand taxation.
  7. How the financial system works-The fundamental difference between wants and needs; consumer awareness and advertising; fraud and its consequences; future consequences of financial decisions most importantly, how to plan for life after high school.

For, young people are entering the professional fields without the basic skills to manage their personal financial affairs, putting them at a high risk for not being able to plan responsibly for their financial future. Armed with the knowledge to discern is the best way to protect them from becoming victims of financial ignorance.

Financial literacy contributes to the development of knowledgeable, compassionate citizens. Education has a responsibility to transmit to students not only the knowledge and skills required for academic learning but also the habits of mind and heart that are necessary for good citizenship. Financial education will provide an understanding of responsible, ethical, and compassionate financial decision making in order to contribute to meeting that goal.

School teachers recognize that financial literacy is a fundamental skill to be imparted for college and career readiness.

Benefits of financial education:

  1. prepare for the future
  2. understand debt
  3. critical thinking
  4. learn to assume responsibility and understand the value of money
  5. practical knowledge
  6. learn to invest
  7. basic handling of money
  8. income mobility
  9. improved quality of life
  10. financial stability/security
  11. interpret personal financial documents

While it isn’t wise to expose children to grave financial situations, involving them in everyday money matters will open their minds to the essential aspects of money management and gradually prepare them for dealing with more complex financial matters ahead of time. Though financial literacy is not a simple conversation to have with your children, parents don’t have to do it alone if it starts early at school.

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