How can Educational Institutions impart Financial Education To Students?

Last Updated: Tue, Feb 19, 2019 14:36 hrs

There’s a famous saying, “If You Think Education Is Expensive, Try Ignorance.”

Financial literacy is the ability to understand how money works. According to a survey by S&P Financial Services LLC, close to 76% of Indians don’t understand basic financial concepts. In a country of more than a billion people, most citizens are financially illiterate. This hampers growth and development of the Nation.

Financial education is much more than financial literacy. It’s the science of saving, investing, borrowing and spending money. Sadly, schools and colleges don’t pay much attention to the subject. Young students are taught arithmetic, algebra and compounding interest, but not taxation, saving and investment.

Financial education is very important and its best to start young. Youth invest time and money in fitness, improving communication skills, but not on financial education. For a generation obsessed with spending money, it’s important to learn a thing or two on managing it as well.

Experts believe lack of financial education in schools and colleges as the culprit behind wrong financial decisions. People don’t commit suicide because of poor health. They commit suicide because of financial loss. Financial education can save lives.

The key to a good financial education lies in the curriculum at schools and colleges. The basics of personal finance must be taught at school. Kids should learn to make financial decisions and get feedback in a safe environment. This can be done through a combination of traditional classroom activities, interactive learning through games and limited real world practice. Teaching personal finance at schools leads to a positive impact on financial decision making.

Financial education must not be left to educational institutions alone. Parents must actively involve in the process, with learning through practice. Kids can be given simulated or a real savings bank account, with parents managing them. This lays emphasis on learning by doing and not mere lectures. Financial literacy like saving, budgeting, investing and basic financial decision making, taught by both parents and teachers, keeps kids engaged.

Educational institutions must focus on street smartness in personal finance. Kids must learn to identify deals which look too good to be true, understand the role of income tax or be vigilant against fraud to improve financial capability.Focus must be on situations which have relevance in everyday life like shopping or television commercials. Kids must be taught to identify, “Is this really a great deal?” or “Is this advertisement offering a bargain?”. This helps identify misleading advertisements.

Children can be taught money through mathematics by imparting it to real-life scenarios. Many children neglect mathematics, believing it to be irrelevant in daily life.Children can be taught mathematical concepts like lending, borrowing, interest rates, budgeting and then applying them to real-life scenarios.Most children are familiar with money and financial education through mathematics, teaches them the importance and value of it. Children learn that money is a finite resource and must be spent wisely.

Financial education can be integrated with mathematics, economics or social science and need not be a ‘stand-alone’ subject. Teachers must be adequately trained and made aware on the importance of a good financial education. Educational institutions make sure teachers are easily accessible and high-quality learning tools are used to impart financial education in a ‘real life’ context. Student’s progress must be assessed and achievements in financial education recognized.

Colleges can focus on imparting digital financial education. Digital financial education may be built into computer skills or business electives. Focus could be on homework supplements and in-class discussions on topics like budgeting or wants vs needs.

Students must be taught the practical applications of money tracking and budgeting apps. These apps bring fun into learning with a practical approach. The budgeting app accounts for every rupee spent. This helps trim expenses and free up extra cash. The extra money could be used for saving, investing or paying back the education loan.Students, who learn to save and invest using financial apps, enjoy the benefits for a lifetime.

Holistic financial education includes differentiating between a good loan and a bad one. This is crucial with youngsters spending heavily through credit cards. Students must be taught the implications of a loan default. Focus must be laid on life and health insurance and their role in protecting wealth. Educational institutions must have tie-ups with firms offering financial education.

This is a win-win for both as the quality of financial education improves in schools and colleges. Firms focusing on financial education get quality talent and the benefits accrue to the Nation. Promoting financial inclusion is easy with a financially educated population. Financial education helps youth choose the right financial products, which could spell the end of mis-selling and financial frauds in India.

Be Wise, Get Rich.

The author, C.S.Sudheer is the CEO and Founder of