Credo : Financial Education!

Saving, investing and managing one's own treasure  is the key to long-term financial stability. A man lives in the social set-up where his financial decisions impact not only himself and but his family as well. Financial security in terms of investments for retirement, children education, insurance for health, mortgages and other needs set up the base for a merrier life.

A survey of US adults National Foundation for Credit Counseling depicted that 41%  population stood at or below 'C' with respect to their financial knowledge. Other researchers reported the increment of credit card debts and home foreclosures. Needless to substantiate, this was one of the major causes of the recession in 2008.

The recent report by Global Partnership for Financial Inclusion also made it mandatory to shift the drift of financial inclusion towards financial capability. This means that the lay man investor would be able to benefit from the financial services only if he is financially educated. For example, providing credit to innocent farmer with inadequate knowledge would even lead to further indebtedness .

Financial education depicts understanding of mortgages, savings, investments, banking services, mutual fund investments, credit cards, insurance, taxes, etc. The awareness of these aspects will help in understanding the risk involved and taking informed financial decisions.

Now the question arises what is the right age and strategy to offer financial training? At home by parents or at school by teachers? At secondary school level or before that or at higher education level?

According to my personal and professional experience, the seed of financial education should be propagated right at the initial stages of human life. For example, even a child of seven years could be taught about savings in his money bank and buying things out of his savings only, he could even be taught trading off for something to fulfill his unwarranted wishes. Similarly, school curriculum could engage students on financial topics when teaching time value of money, or interest rates, savings and investments. In many developed countries, the government has even announced to incorporate finance and investment topics in the curriculum.

The importance of financial education at school level can also be accentuated by the number of education loans floated by students enrolling for higher education. The students immediately after 18 years of age open their own bank accounts and possess personal credit/ debit cards. Sound financial decision making capability, thus, is necessitated at this stage.

Though financial curriculum would improve theoretical knowledge of students, imparting financial education should not be divorced from day today experience. The parents responsibility go hand in hand with the schools to help the young generation develop right aptitude for handling money related matters.

Irrefutably, in current economic scenario, it is indispensable to save and make right investments. The current Gen X has an onus to shape financially sound Gen Z.