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Teaching kids about money early on, especially with the help of fun and simple tech tools, sets them up for a brighter future. It’s all about giving them the confidence to make smart choices and take charge of their financial lives.
Nothing is more perilous than a young person who has no financial literacy. Someone who doesn’t know how to handle their money can quickly fall into a variety of financial traps without even realizing it. Making poor financial decisions is typically tough and might take years to correct. Early exposure to the subject of money will provide kids with crucial knowledge and skills that will help them make wise decisions regarding their finances.
One of the most effective strategies to close the gap between your wealth creation path and economic growth is through financial literacy. It mainly entails your comprehension of how accounts operate, how to utilize credit cards, and how to stay out of debt. Your decisions regarding savings and investments will lack a solid foundation if you lack financial literacy. Financial literacy will also offer comprehensive knowledge of financial education and tactics that are essential for financial success and prosperity.
But why is teaching children about finances and starting financial literacy at an early age so important?
Let’s find out.
What Is Financial Literacy, and Why Does It Matter for Students?
Financial literacy is the concept of understanding the monetary aspects and their impact on our lives. Simply put, it’s creating awareness about one’s finances and ways to manage them. This includes learning the basics of earning, spending, and saving money in various forms. While many people think this skill doesn’t have to be taught and we learn it on our own, it is not true. Financial literacy has to be taught. Experts say, the sooner you begin, the better the results.
Hence, promoting financial literacy for students in schools (K-12 education) is necessary to train them to make sound financial decisions. For example, kids get pocket money from their parents which they can spend or save the way they want. With financial literacy, students can maintain a record of their monetary transactions and weigh their options. If a child wants to buy a new toy with their pocket money, they will learn how much to spend, how much to save, and how long it will take for them to buy the toy (based on its price).
Financial literacy benefits are numerous, which makes it a necessary part of early learning and education. From inculcating discipline to enabling students to manage their finances, financial literacy can create a generation of aware, capable, and efficient adults with responsible behaviors. Additionally, students from marginal and poor communities can find better opportunities to attain financial stability and security through effective money management.
The Importance Of Teaching Children Financial Literacy
GP Garg, the executive director of the Securities and Exchange Board of India (Sebi), at an NSE event, said that even though India has close to 80% literacy, only 27% of Indians are financially literate. This boils down to less than 3% in the case of kids. While children are encouraged at home to save through “Piggy Banks” at an early age, they are not taught other more important aspects of achieving financial independence like budgeting, investing, and the power of compounding.
India is a developing economy, and we are growing rapidly in terms of technology as well. The use of UPIs, credit cards, internet banking, and online transactions have increased a lot. But with these, so has financial frauds and debts. The lack of financial literacy is the reason why people are unable to avoid such things. Even when there are so many campaigns running about awareness, it’s still a huge issue.
Financial literacy, just like science and maths, takes years to learn and master. It needs to be gradually moved from easier things like the concept of money, saving, and budgeting to understating various investment methods and markets. This is why it should start at an early stage in life so that adults can be well prepared to manage their finances before they even start earning. A strong foundation of financial literacy from childhood can help support various essential life goals, such as saving for education or retirement, running a business, and managing debt responsibly.
Using Edtech To Teach Financial Literacy To The Children?
Edtech is the tech used for bringing IT tools into the classroom to make learning more engaging, inclusive, and personalized. Certain hardware and softwares are designed to enhance the learning experience in the classroom as well as make it easier for the teachers to provide a better learning experience to the students. Edtech not only makes learning easier for the students but also reduces the burden on the teaching faculty.
There are multiple types of Edtech tools like learning management tools (Google Classroom, TalentLMS, ProProfs), student information systems (Wisenet and Workday), classroom management software (ClassDojo, Socrative), assessment software (Kahoot!, GoReact), and an AI question generator like PrepAI. Each one of these tools is extremely helpful and makes both learning and teaching easier.
Three main issues that arise while teaching children financial literacy are not having a clear starting point, limited time, and a somewhat “tedious” syllabus. While financial literacy is essential, children do not exactly know how essential it is. For them, it is just another boring subject along with maths and science. This hurdle is hard to tackle for the teachers. Also, financial literacy is a vast subject that will take years for children to grasp and this also makes it hard to pin a starting point. From where do we exactly start teaching children these complex concepts.
Teaching financial literacy with education technology will help education institutions easily cross the above hurdles. EdTech can not only make financial literacy interesting for children, but it can also make it simple and and encourage students to become financially responsible adults.
The Role of Technology in Teaching Financial Literacy
Technology has a crucial role in teaching financial literacy to teens, especially in today’s world where smartphones and payment apps are a part of our lives. It’s easy for kids and young adults to buy anything with a click of a mouse or a tap of a button. But what are the consequences of this if the children are not financially literate or understand the complexity of managing funds?
To avoid chaos and spiraling debt, technology can be used to teach and promote financial literacy. Technology can help achieve the following:
Discipline and Strategic Planning
Students can learn how to save money, where to invest, and how to plan their expenses from experts on social media platforms. Of course, one should not follow every advice without understanding it. However, technology made it possible to access these perspectives easily. Moreover, there are online tools to calculate savings, interest rates, etc., and provide a framework for stronger financial planning.
Better Decision-Making
Financial literacy lesson plans can be created by teachers as a part of the curriculum. This way, classrooms can become a safe space for students to learn and practice financial planning. It helps young adults make better decisions with help from teachers and peers. They can discuss the pros and cons of an investment scheme or a mutual fund offer to determine its worth. Instead of making money a hush-hush topic, teachers can actively encourage discussions about real-world scenarios.
Credit and Debt Management
How to borrow or lend money? How to understand the loan terms and agreements? What is a credit score? What are the ways to repay loans responsibly? Technology can help find answers to these questions and more. In fact, teachers can use online tools to explain the concepts and conduct assessments to test students’ knowledge. With AI quiz maker tools like PrepAI, teachers can ensure students learn credit and debt management.
Tracking Finances
With so many apps and tools in the market, teachers can explain how students can track their earnings and expenses in real time and maintain neat records. Arranging seminars with financial experts, sharing realistic tips and tricks to saving more money, etc., can be done. Teachers can give students regular assignments to track their weekly or monthly expenses and create a balance sheet, which can be discussed in the classrooms.
Engaging Lessons for Budgeting
Technology provides many fun ways to teach financial literacy. It makes the topic interesting and engaging. For example, gamification of budgeting using AR and VR technologies turns the complex process into a fun activity. This way, students learn quickly and remember the lessons for a longer duration. Over time, they will automatically implement the same in their lives.
The Benefits Of Teaching Financial Literacy With Education Technology
Edtech Makes Learning Financial Skills Fun
Children can learn financial literacy skills in an entertaining and highly personalized manner using Edtech, allowing them to learn at their own pace. Teaching financial literacy with education technology fills in knowledge gaps that their parents aren’t addressing at home. Edtech also turns complicated financial lessons into games or interactive videos, which makes the learning experience fun. It takes the boredom out of financial studies.
Simplifies Complicated Financial Topics
Finance is a complicated subject that both children and adults find intimidating, but educational technology can help to simplify and split the subject down into manageable bits. Children can feel more in control of their own learning process now that they have access to financial technology and digital tools at school and at home.
Edtech Can Gamify Finance
Edtech can also be used to gamify finance, which can improve your students’ learning engagement and receptivity. LMS (learning management systems) features games for the entire class to play together as well as a customizable leaderboard where students may earn points and badges.This competitive, as well as a fun technique can make understanding financial concepts easier.
Makes It Easier For The Teachers To Track Progress
Digital tools also make it easier for teachers to track progress and mark weaker areas easily. This way, they can provide more personalized learning support to the students and make sure that all concepts are clear.
Conclusion
While we are moving to a more developed economy, we need to ensure that the future generation is equipped with the right knowledge and skills to handle their finances well and not just keep earning more and more.
Ultimately, teaching financial literacy with education technology will make teaching and learning finance more entertaining and easier.
FAQs
1. Why should students be taught about financial literacy?
You should teach financial literacy to students to prepare them to face real-world financial complexities and make better decisions. It is an effective method to improve their budgeting and decision-making skills.
2. How can students become financially literate?
Students can become financially literate in many ways – role plays, webinars, assessments, assignments, classroom lessons, quizzes, workshops, etc. They can use financial apps to understand savings and debt management.
3. What is the role of financial literacy in improving mental health?
Financial literacy improves mental health by reducing stress and anxiety about money. When students become capable of planning their finances from a young age, they will be more aware of where things stand and what risks to avoid. They can have healthy relationships and discuss finances openly.
4. What is the role of teachers in promoting financial literacy in schools?
Teachers act as guides, mentors, advisors, and role models in helping students become financially literate. They explain the concepts in simpler terms and provide personalized feedback. They can create an environment where students from different backgrounds can learn about financial management and make their lives better.
