The need for financial literacy and its inclusion in the education system has been acknowledged across the globe. While a lot of experimentation has been done in the realm of financial literacy, it is difficult to point to one standardized method or approach that works best in all scenarios with all kinds of target populations. Although this could be attributed to the lack of a standard definition or measurement tool, it is also a result of India’s diversity in terms of language, caste, culture etc. Hence, it is challenging to design a product that ‘fits all’ sections of the population equally well.
If we take into consideration human beings, then the financial needs of an individual vary primarily by his/her age. Initially, when children stay with their parents and go to school, an individual should know-how to save their pocket money or scholarship and utilize it effectively. But they are never taught nor do they ever try to learn also how to effectively manage their limited finances. Why blame parents always?
Following studies, students move out of the parents’ house and begin to live on their own (or with friends/ housemates) and earn their own living. Now all of a sudden they require a banking service, complex investment products (because in the present time, youth is more inclined to risk-taking and are open to experimentation) and remittance services that would enable them to send a portion of earnings to parents who are not able to do as much physical labour as they could earlier. Sometimes this all is also done in the societal pressure and government pressure to manage their financial resources.
As time progresses and the individual gets married and starts a family, he/she is required to think about safer financial products and longer term investments. His/her dependency ratio is highest at this point – both children and parents are dependent on the individual.
This cycle never ends, it keeps on going and going. Considering the aforesaid financial services’ requirements at various junctures in life, four teachable moments can be identified: school-going child, youth, middle-aged and old age. These are the specific stages of transition when the need for financial products/services takes a leap and it is crucial to make the right financial decisions. Thus, it’s best when time and again the person is taught about money management advice.
To elaborate, the cognitive ability of a person starts developing when they start going to school. At this stage, an individual is immature with low or no understanding of emotions and concept of time. Although no research has been done to study the impact of any kind of financial literacy training on school-going kids, yet school or the time spent in school is considered the best. It is considered, that whatever the students are taught in school, they somehow remember it all throughout their life.
As of now, RBI Governor Raghuram Rajan, on his recent visit to Madhya Pradesh, proposed the inclusion of financial literacy in the school curriculum. Rajan, who is on a two-day visit, also praised the growth of Madhya Pradesh and discussed local operations of RBI, familiarize himself with the working of Regional Rural Banks in the region and understand local opportunities and challenges. He also said that the rating of states should be done on the basis of their financial position.
Many of us often think that the students of our country are never taught about the things practically. But it is completely wrong. The practical subjects like Physics, Chemistry, Biology and Commercial Applications are taught practically to the students from Class 8 and finance from Class 11 onwards by their respective subject teachers. It depends on the students in the near future how they apply that in their practical life.
Now think when the students at the tender age would have been taught how to manage the finances when they will step into employment, they will automatically be possessing good sensory abilities and memory skills. Reasoning and logical thinking will be fully developed. At this stage, an individual is highly ambitious and feels a need for independence, self-reliance and freedom from authority. Acceptance among peers is equally essential.
Earlier in the year 2019-10, CBSE had proposed to include Financial Literacy in its curriculum but somehow it couldn’t get implemented. And we will be more than happy and remarkable if this thing gets implemented in the regular school curriculum. Now all depends on HRD Ministry that they accept the proposal to include Financial Literacy and further instructs CBSE to include it, either in the core or elective subjects and make amendments accordingly in the subjects.