Financial literacy is the ability to use knowledge and skills to make effective and informed money decisions.
Introducing money concepts to our children at an early age will help them grow into adults, who can achieve financial security and success.
What is financial literacy?
Financial Literacy refers to the ability to use knowledge and skills to make effective and informed money decisions.
The Organization for Economic Co-operation and Development (OECD) defines financial literacy as – “A combination of awareness, skill, attitude and, behavior necessary to make sound financial decisions and ultimately achieve individual financial well being.”
What is the financial literacy rate in India?
India is the home to almost one-fifth of the world’s population and has an overall literacy rate of nearly 80%. Yet the financial literacy rate in India is the lowest.
According to a survey conducted by The National Centre for Financial Education in 2019, only 27% of the Indians are financially literate.
Why is financial literacy important for children?
Indian families believe that their children are not old enough to learn about finance.
We live in a world where we do not allow our children to jump into the deep end of the pool before he or she learns how to swim. Nor do we allow them to drive before he/she learns to drive. But we allow them to enter the complex financial world without teaching them basic money skills.
Someday children have to start making basic financial decisions in their lives. Then why not start early. If we teach them financial literacy at school age, it will help them in the long run in making financial decisions.
How to start teaching them financial literacy?
It is said that “parents are the first teachers of their children.”
As a parent, we can start by ensuring our children inculcate a habit of savings with a piggy bank, making a budget, recording their expenses in their diary.
Apart from that, you can talk to them about money, take them to grocery shopping or banks with you.’
However, not all parents feel confident in their familiarity with financial literacy or may not know the best way to introduce various concepts of money to their children.
FinStart understands this need to teach kids about the importance of money and how to manage it.
It is a one-stop destination, offering programs for children in the age group of 7-15 years teaching them financial literacy skills.
Contact us to know more.
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