Financial Literacy

Jun 13, 2024

Financial literacy is an important life skill needed for active involvement in today's society. Children are growing up in a world that’s becoming more complex, where they'll eventually need to handle their own finances. As they become independent young adults, they'll need to learn how to budget effectively and make smart financial choices, like choosing phone plans, online products etc. Additionally, they'll need to learn how to manage risks, such as saving for unexpected expenses, avoiding excessive debt, and planning for healthcare.

Furthermore, economic and technological advancements have made the world more interconnected, changing how we communicate, handle finances, and interact socially. To prepare students for the financial challenges that they will undoubtedly face, it is essential to establish a solid foundation in financial literacy.

Basic Financial Skills

It is important in today’s world that students in school should know the basics of financial literacy. Everyone should be aware of the basic financial skills and concepts that form the basis of financial competence. Below are some basic financial skills which all the good schools in Bangalore should teach their student:

  • Budgeting: Learning how to allocate income to meet expenses and savings goals.

  • Saving: Understanding the importance of setting aside money for future needs or emergencies.

  • Spending Wisely: Making informed decisions when purchasing products.

  • Understanding Interest: Knowing how interest works on savings and loans.

  • Tracking Expenses: Monitoring and analysing where money is being spent.

  • Risk Analysis: Identifying upcoming risks and assessing and managing the ups and downs while managing money.

Schools in Kodigehalli and other areas in Bangalore are following this and equipping the students with the necessary financial skills. We at NCFE Mandur, Bangalore strongly emphasise financial literacy from the early age of students.

Benefits of Financial Literacy

Holistically, the benefit of financial literacy is to empower individuals to make smarter decisions. More specifically, financial literacy is important for several reasons:

  • Encouraging Entrepreneurship

Financial literacy has the potential to instil a sense of entrepreneurship and self-reliance among students. Through understanding business finances, investment strategies, and entrepreneurial fundamentals, students are encouraged to explore their innovative ideas and transform them into successful business endeavours. Providing students with entrepreneurial insights not only enhances their personal development but also plays a significant role in economic growth and job opportunities within society.

Moreover, financial literacy plays a crucial role in promoting financial independence. By equipping students with the necessary skills to effectively manage their finances, they become less dependent on external financial assistance. This newfound independence empowers students to take charge of their financial destinies with confidence and assurance. At NCFE Bangalore, our motto is Inspire Excellence. Among CV Raman Nagar schools, NCFE is one of the few schools which promotes lifelong learning and entrepreneurial spirit

  • Promoting Well-Being and Mental Health

 

Financial stress is a widespread concern impacting individuals across all age groups. When people face financial difficulties or lack the necessary knowledge to manage their finances, it often results in feelings of anxiety, depression, and other mental health challenges. However, financial literacy serves as a solution to mitigate this stress by providing students with the tools to navigate their finances with confidence.

Empowering students with financial management skills reduces the likelihood of them feeling overwhelmed by financial burdens. Consequently, this improvement can have a positive effect on their mental health and overall life satisfaction. By prioritising financial well-being, we contribute to building a stronger and more resilient society. NCFE emphasises mental health and has partnered with My Peegu, focusing on mental health.

  • Strengthening Decision Making

In today's era of digital finance and online transactions, it's important for students to understand potential risks and cybersecurity threats. Financial literacy education covers topics such as online security, identity theft, and ways to safeguard their financial information from fraud. 

Furthermore, financial literacy provides students with valuable critical thinking and analytical skills that go beyond just personal finance. They learn to assess financial information, consider advantages and disadvantages, and make informed decisions supported by evidence and data. These skills are applicable to different areas of life, helping to develop individuals who are well-rounded and ready to tackle the complexities of the contemporary world. All the good schools in Indiranagar Bangalore try to teach financial literacy to kids from early grades.  

  • Nurturing a Prosperous Economy

Individuals with a good grasp of financial matters are inclined to make constructive contributions to the economy. They are better prepared to handle their own finances, which can ease pressure on social welfare programs and allocate resources to other critical services. Additionally, financially knowledgeable individuals are more inclined to invest, initiate businesses, and aid in economic advancement.

Encouraging financial literacy from a young age is an investment in our country's economic welfare. As students mature into responsible adults who grasp the significance of financial management and investment, they will play a beneficial role in enhancing the economic health of society. NCFE school alumni have demonstrated this and are currently motivating young students to thrive.

Conclusion

The benefits of financial literacy extend beyond individuals to families, communities, and society as a whole. By promoting responsible spending and a culture of saving and investing, we contribute to a financially stable and resilient society. Encouraging financial independence and entrepreneurship helps cultivate a generation of confident individuals ready to explore innovative ideas and contribute to economic growth.

In summary, financial literacy plays a crucial role in education by equipping students with the challenges and opportunities they'll encounter in the modern world. Through instruction in personal finance, budgeting, investing, and entrepreneurship, students gain the skills needed to manage their financial futures and make well-informed decisions that positively impact their lives.