Being financially responsible at a young age – why does it matter?

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Ms. Deepali Tiwari- Principal, Orchids The International School, Jabalpur

Understanding how money works is one of the most important life lessons that you can teach your children in today’s time. The benefits of being financially responsible, especially from a young age, go beyond dollars and cents. At the school level, every child is either interested in money and its matters or realises its significance later in life. Often, we observe that children struggle to comprehend the concept of money and the associated benefits. Considering the current times, we have understood the need of the hour and have incorporated a program to foster financial literacy at the school level.

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Earlier, the traditional academic curriculum focused on educating students about the history of our existence, the science of being human, or the practical aspects of everyday life. However, in today’s fast-paced world, being financially responsible is imperative, and it can serve as a success magnet for young individuals. Financial literacy is an essential area of knowledge where many people lack understanding, often leading to financial struggles. Introducing the concept of financial literacy at a young age can help children develop the necessary skills to become responsible adults. Here are some key points for inculcating financial literacy in children:

Teach them how to plan a monthly budget:

Planning is the first step towards being financially literate, and children can be taught to identify their day-to-day needs and plan for their future goals. Schools can incorporate financial literacy programs into their curriculum, and parents can facilitate role-playing activities at home where the child plays the role of a financial advisor and creates a budget for the upcoming month.

Inclusivity of financial literacy in everyday life:

Teaching children the importance of purchasing goods and services only when necessary is a crucial aspect of financial responsibility. Providing real-life examples can help children understand the subject better, and learning this at a young age can prepare them to become responsible adults.

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Make it fun to learn about money:

Engaging children in games and activities that interest them can make the learning process more enjoyable. Board games or online games like Monopoly can help children understand the basics of finance and the mathematics behind the exchange of funds. By teaching financial literacy in an interactive and fun way, children are more likely to learn and develop these important life skills.

Financial literacy is a fundamental part of our lives, and introducing it as part of the regular curriculum can help individuals sustain a better future. Many schools recognize the need for financial literacy and have introduced programs for all age groups, starting from Class I onwards. Through such programs, children can learn how to achieve their financial goals and become financially responsible adults.

Now let’s understand the need for financial literacy?

Imagine your child’s first day at school, and you give them money for lunch. This is their first exposure to finance. Instinctively, they might use it all at once. However, a child under the influence of financial literacy would save the money wisely, perhaps for their favourite candy or for something bigger and better!

Generally, parents do not expose their financial struggles to their children, as they believe it may negatively impact their thought process. Indian households have traditionally operated this way, where children are not involved in certain matters of the household. Nevertheless, the ongoing and upcoming generations are breaking the barriers of secrecy and creating transparent communication between parents and children.

As we know, children are like clay and can be moulded in any way their parents desire. In these times of young entrepreneurs, the upcoming generation is gaining the desired knowledge and appears to be quite thorough with the concepts of finance and its learning methods. This will undoubtedly produce more and more successful leaders in the future.

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