“Money, like emotions, is something you must control to keep your life on the right track.”

- Natasha Munson.

The quote highlights the importance of discipline and self-awareness in both emotional and financial aspects of life. Uncontrolled emotions can result in impulsive actions and poor decisions, just as poor money management can lead to financial challenges like debt, stress, and scarcity of resources. By managing both emotions and finances wisely, individuals can make more thoughtful choices, prevent negative outcomes, and achieve a balanced, successful life.

What is financial literacy?

Financial literacy is the knowledge needed to make informed money management decisions. It encompasses budgeting, saving, investing, understanding credit, managing debt, and retirement planning. This understanding helps individuals utilise financial products, make wise spending choices, avoid scams and excessive debt, and achieve long-term financial goals, ultimately promoting financial well-being and future security.

When is the right age to educate someone on finance?

Incorporating financial literacy into school curricula provides students from an early age with essential knowledge and skills for making informed financial decisions later in life.

1. Early exposure to budgeting, saving, investing, and understanding debt fosters responsible money management habits.

2. This preparation equips students to face real-world challenges, minimises the likelihood of financial errors in the future, and encourages long-term financial independence.

3. With a solid foundation in financial literacy, students can navigate complex financial systems, steer clear of pitfalls, and plan for future aspirations such as education, home ownership, or retirement.

4. Individuals who possess financial literacy are better equipped to make informed decisions, which in turn allows them to contribute positively to the nation's economy.

Here are a few ways how educational institutions can integrate financial literacy into teaching methods

1. Incorporate it as part of the school curricula –

Introduce basic financial concepts such as earning, saving, spending, investing, budgeting, sharing, etc. at age-appropriate levels. Integrate and customise these concepts into existing subjects like math, social studies, or economics. The concepts can get more elaborate as the students progress to higher grades.

2. Through various activities, including:

A. Interactive and fun board games like Monopoly or online money management games.

B. Budgeting projects – Where students can be given the responsibility of managing the resources and expenses for a class party or a small event.

C. Field trips to financial institutions and small and medium businesses to understand managing money in real-life settings.

D. Interactive workshops on topics such as saving for a goal, smart investments, understanding interest components, etc.

E. Schools can encourage students to take part in fundraising or community service projects that involve budgeting and allocating resources.

3. Train teachers to effectively teach finance-related concepts to children with ease.

A. Conduct professional development workshops focused on financial literacy teaching strategies and support them with required resources.

B. To stay abreast of the latest concepts and teaching methods, teachers should be encouraged to take up online courses and certifications.

C. Provide teachers with experiential learning opportunities by involving them in activities they can implement with students, such as budgeting exercises and savings challenges.

D. Collaborate with local financial institutions or organisations that focus on financial education to offer training sessions and resources for teachers.

According to a survey by Intuit, 81% of students get their financial knowledge from parents or guardians¹. Here are a few ways how parents can integrate financial literacy into everyday routine to help kids grasp the concepts easily -

A. Set saving goals – To help children save and buy what they are aspiring for, teaching them the value of earning, delayed gratification, and saving.

B. Involve them in family budgeting – Parents can share the family budget with older kids and explain how money is allocated for various expenses. Kids can be involved in grocery shopping, where they can be taught to compare prices and introduced to the concept of smart spending.

C. Savings/investment accounts – Introduce kids to the concept of investing by opening a bank account and teaching them how savings can grow over time with interest or through investment accounts.

D. Develop role-playing scenarios that allow kids to practice making financial decisions, such as managing a small store or organising a party within a budget.

E. Illustrate the impact of good financial choices with real-life examples. This can include saving to buy a vehicle, planning a vacation, etc.

Closing thoughts

Teaching financial literacy to children is vital for helping them make informed money decisions. Understanding budgeting, saving, and investing early fosters responsible habits, leading to stability and success in adulthood. This knowledge builds confidence in resource management, contributing to a financially savvy generation.

Disclaimer

The article is curated by referring to various credible sources and does not necessarily reflect the opinions or positions of QS I-GAUGE. The information provided is for general informational purposes only, readers are advised to conduct their own research and seek professional advice before making any decisions.