Learning how to invest and manage money wisely will eventually become an important life skill that teens will need to master to achieve their goals. This becomes all the more important as India’s future growth and development will be driven by entrepreneurship and learning the ropes of money management is very crucial at a young age.
Unfortunately, financial literacy is often excluded from the curriculum of the traditional education system. Children and adolescents enter adulthood without knowing how to properly manage their resources. As a result, parents are the primary educators when it comes to teaching teens money management skills.
Here are some ways parents can teach their children about financial literacy:
- For starters, parents can give children money to buy food from the school canteen so they can control their spending.
- You can also help them understand the cost of things so they understand the value of money.
- Piggy banks can be a good start for children to learn to save. They will reduce their expenses to start saving a little each day, thus beginning their journey towards financial education.
- If the kids list a few things, try not to buy them everything. Instead, let them choose a few items to buy from this list. This will help them spend wisely.
- Monopoly and other business games will also make them proactive about money matters.
- Take your kids to the supermarket, let them know your budget, and sit down with them while making a rough list of things you want to buy from the supermarket.
- Let them know if you’re in a financial crisis, they could cut spending and learn how to spend wisely on the things that matter.
- Introduce them gradually to the world of investments, starting with a FD; also open a bank account for them.
- Once they learn about the benefits of investing in FDs, they gradually introduce them to other investment instruments.
- Technology has also simplified one-click investing, allowing consumers to invest with ease. Introduce your child to the concept of digital finance and help them make informed financial decisions.
Several organizations have taken the following steps to ensure teens are financially literate as part of the government’s financial literacy strategy.
1. Financial Literacy Project
The Reserve Bank of India (RBI) has undertaken a project, “Project Financial Literacy”. The objective of the project is to disseminate information about central banking and banking concepts to various target groups, including school and college children, defense personnel, the elderly, women, and the rural and urban poor. .
The project is implemented in two modules. A module familiarizes users with the role and functions of the Reserve Bank of India. In the other module, users are introduced to banking concepts.
2. NCERT – Personal Finance Additional Reading Materials
There are a total of 9 modules covered sequentially: Financial Plan, Budgeting, Managing Your Money, Asset Financing, Protecting Your Assets, Investing Money, Retirement Planning, Taxes and You, and Career Planning .
3. Pocket money – the student’s guide to money
It is a financial literacy initiative of the Securities and Exchange Board of India (SEBI) and the National Institute of Securities Markets (NISM). The aim is to help school children understand the importance of financial management and the value of money.
4. Financial education for schoolchildren
This document has been prepared under the guidance of the Investor Protection and Education Fund (IPEF) Advisory Committee of the Securities Exchange Board of India (SEBI) and the National Stock Exchange (NSE). It covers modules on the following topics: Money Matters, Planning, Budgeting, Investing and Stock Market.
5. Introduction to Retirement Planning for Students
This material is developed by the Pension Fund Regulatory & Development Authority. It aims to explain retirement and effectively plan for retirement with different retirement plans.
6. Commodity futures market for students
This resource helps students understand the basics of commodity markets.
7. Material on insurance for children
The resource is available as comics and videos and is developed by the Insurance Regulatory and Development Authority (IRDA). It aims to explain the basics of insurance, several types of insurance, the insurance ombudsman, ULIP (Unit Linked Insurance Plan), etc.
Allow your children to learn about money, whatever their age. They can become financially responsible individuals and entrepreneurs who make sound financial decisions with proper guidance and sound money management habits. Adults who know how to budget build family relationships while contributing to economic progress.
(The author is co-founder and CEO, Pencilton)
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