Why Developing Financial Literacy for students is Important?

Encapsulating strong financial habits in students is crucial to keep them updated on monetary matters from an early age. They learn best as a child and this will help them build a rigid money management idea as they grow.

In this regard implementing financial literacy for students, especially in schools and routine life, will expose them to the functioning of simple budgetary notions. Understanding the importance of doing this will help parents, guardians and teachers to guide them through this path.

Teaching students about their financial matters helps them boost their skills and induces them in practicality. The following points act as the reasons behind the meaning of financial literacy, especially for students:

• Helps in making financial decisions, like planning, saving, etc.
• Aids in setting practical financial goals by learning how to save money
• Opens investment options
• Reduction in monetary stress because a rough idea of it gets developed
• Helps in structuring budgetary notions
• Helps in choosing loans, investment options, health insurance, etc., from a better grounding

It is natural for your child to be unaware of the value of money. However, if you teach them money management from an early age, it will help them in future to handle budgetary notions more efficiently.

Following are some other importances your child can expect through financial education:

• To Learn Financial Planning: This will encourage your child to plan with the money they get. They will try to fit these small amounts into fixed period of time and thus will gradually develop financial skills for money saving.
• To Learn Making Budgetary Decisions: Learning about taking loans, mitigating taxes, etc., will come forth as they grow up and have an account. It will help them make better budgetary decisions if they get familiarised with basic ideas related to finance like asset, liability, cash flow, etc.
• To Help in the Long Run: As they grow up they'll make their monetary decisions and opt for choices that'll benefit them. It is crucial to have affirmed knowledge of basic financial education so that they can rely on themselves effortlessly.

The need for financial literacy is further significant on a national basis. Many adults struggle with primary notion of finance that makes them lose hoards of money in fraud cases.

Some of the reasons why it is important are mentioned below:

• To Avoid Fraudity: Youngsters getting introduced to monetary matters from the beginning will develop certain ideas that will enable them to think twice before stepping into fraud traps. They will refrain from sharing their credentials like passwords and so forth with strangers.
• In Developing Nation’s Financial Health: Many people fall victim to fraud in financial matters and lose their money as mentioned before. This affects the country's monetary stature, where even adults don't know much about basic finance concepts and get tricked by financial agents too.
• To Avoid Falling into Debts: Many people fall into debt because of least knowledge of financial planning. Other than unavoidable situations, making money matters chalked out is crucial so that a person can save in leisure time and use it accordingly during emergencies. Making sure that they'll almost never fall short of money is a vital factor. This is why schools should teach financial literacy from the beginning.

Apart from learning about financial matters, your child should grow a clear idea of where to invest their money. This way, it will help them to use it in practicality.

Following are some kid-friendly ways to easily save money:

• Get Them a Piggy Bank: Buy a toy piggy bank for your child and let them know how to save money slowly. They might break it more often greedily, but it stands on your part to make a strict notion of not providing money easily.
• Minor Account: Many financial institutions support this notion of opening an account for your child. Most of them have eligibility criteria of becoming at least 10 years old while opening an account for them. This will not only help them understand how to save but will introduce them to easy and basic financial terms that they will gradually grow accustomed to.
• Stock Market: Since the stock market is currently on the rise, you can open an account for your child and introduce them to the most primary aspects of it. This will make them understand better the twists and turns of how the market works and other related factors.
• Other Investment Options: Another way of investing in your child is to opt for different governmental schemes. Since the option of children investing by themselves is currently minimal in India, parents can initiate this opportunity by opening an account on their behalf of them. This way you can guide them through it while also keeping track.

Making things fun will enrich any child’s curiosity. Using this ability, try to level up by introducing new games, stories and other methods in teaching them financial matters simply. You can also follow the below-mentioned ways to do so:

• Send Them to Do Little Chores: No other way is more effective than letting them apply these skills in life. A better way to start this is to send your kids to a neighbourhood shop for buying something. Start small and give them simple instructions on how to do it. You might also accompany them or be there while they make the purchase. This will help them learn that money is a significant factor in the purchasing process.
• Hand Them Monthly Pocket Money: When they reach a certain age, start giving them small amounts of money and provide strict guidelines on what they can and cannot do with it. It is possible for children not to understand everything and misuse it for several purposes, but staying strict on this will make them chart out their financial planning.
• Reward Them Money for Small House Chores: Another way to reflect the idea of basic financial idea is to assign small tasks to your child and by rewarding them with a small amount of money. However, certain precautionary acts should be taken into account in this regard. Make sure that this doesn’t become a habit which will lead to your child having blind monetary expectations from you. Also, see to it that they understand that it requires hard work to earn something. The necessity for this is increasing with time. India's deficit in handling monetary matters is no surprising thing. Inducing this practice of financial literacy for students will also help them teach their parents and guardians and guide them through the right path. It'll help them and others around them irrevocably.