hy do schools need a lesson in money management?
Today, we are back with a new and refreshing topic “Why do schools need a lesson in money management skills?”
Our education system definitely needs an urgent overhaul. Not just in terms of the content of the subjects being taught in schools and colleges, but also in terms of the other important life skills our children need to learn but have been much neglected.
A question that really bothers those who have been in the field of financial literacy for the past eight years is why they aren’t being taught money management skills. While teachers are teaching children to study well to secure a good future, they need immediate intervention to teach a few basic life skills like financial skills.
We see people all around us trapped in (and as per various studies) financial stress due to bad financial planning. In today’s world of incessant noise through social and electronic media, incentive driven finance industry and a whole lot of “market gurus” and finfluencers who do paid promos in the guise of educational information, we can clearly see where the problem lies. While some financial institutions conduct some of these investor education sessions, it is usually incomplete and unstructured.
So what are the serious issues people are facing today?
—No formal education on how to plan one’s financial journey.
—Taking on loans due to a lack of proper goal-based planning.
—Not accounting for high inflation while making these plans and hence falling short
—The FOMO (fear of missing out) created by the real estate industry and lending institutions about the importance of owning a house is leading to huge amounts of interest payments over a long period, distracting people from making the right kind of investments.
—Lack of or inadequate insurance.
—Lack of diversification of assets. Hence, most of the household income goes into real estate, gold and fixed deposits. There seems to be a fear of financial assets and hence “safer havens” are the first option.
—Overuse of credit cards and late payments.
—Bad or no retirement planning. Today a 60-year-old is looking at another possible 30, or even 40 more years of nil income amid growing healthcare needs.
—Many women neglect family finances as they believe it is a male domain or because they think it is tough to understand.
—Many youngsters are encouraged to take a home loan as soon as they start earning or look at trying to save taxes as soon as the first pay cheque hits their account.
—Lifestyle expenses have shot up not just in urban India but even in rural India as aspirations and first gen graduates and employees have opened out a whole new world.
Conclusion
Money management and personal finance skills should be the key grinding areas of students right from school days. Thus, we conclude that a sound knowledge of some basic financial skills will go a long way in ensuring a more prosperous, debt free life.
Source: https://www.livemint.com/