Financial Literacy for the Youth: Yay or Nay?
Can children understand money management and finances? Do they even want to? When I visualise adults sitting down to talk to their children about how to spend and earn money, I imagine they’d leave five to ten minutes later with the groans of their childrens’ unwillingness ringing in their ears. Let’s face it, even 10-12 year-olds don’t want to be involved in tiring talks on financial literacy, finances, blah, blah, blah.
So, this article will talk about how kids and adults lack the awareness to manage their money, and a certain solution that may change the way we look at our finances.
According to the NCFE survey 2018-19, around 100 crore Indians are financially illiterate, and only 20% of Indian women are financially literate.
As per the Global Financial Literacy Excellence Center survey, only 24% of Indians are financially literate. Other emerging economies like China, Brazil, Russian Federation, and South Africa fare higher than India.
People from low income communities/marginalised communities, and even people like us who have access to resources sometimes lack the awareness on how to manage finances, and this can lead to various personal problems and problems in the workplace, such as poor mental health, too much debt, lack of savings or less financial security in general.
It is not just a lack of money but also the lack of knowledge, attitudes, and behaviours that lead to financial scuffles in most households.
There is no doubt that financial literacy is important, Here, to make it accessible to all is Svatah:
Svatah is a non-governmental organisation founded in Hyderabad with the primary aim of promoting financial literacy among children, youth, and women - especially those from economically poor and socially backward communities.
Its vision is to empower people with decision-making skills to achieve a life of financial stability for themselves and their families. Svatah: currently runs three programs- Svatah: Junior, Svatah: Tycoon and Svatah: Empress (for kids, youth and women respectively). These programs hope to increase financial literacy and encourage young entrepreneurs to manage their finances
I asked the founder of Svatah:, Dr. Santosh Kumar Reddy Dinne why he thought financial literacy is important for both kids and adults and he had an interesting response to share.
Santosh- Tell me one thing, which school are you in?
Vaidehi- Shiv Nadar School, Noida.
Vaidehi- To get a good education and settle down later on.
Santosh- What do you mean by settling down?
Vaidehi- Getting a job and living somewhere…?
Santosh- Would you work if that job doesn’t pay you? For how long?
Vaidehi- As long as it doesn’t impact my financial abilities, I can do it.
Santosh- So you’re saying that you’re studying, from which you’ll get a job, and settle down, and you’re saying that you can only do a job as long as it doesn’t affect your finances. So, you’re telling me that at the end of the day, whatever you want to do, you want to make money out of it, right? You want to be comfortable. So can I assume that, to a large extent, our finances and our comfort, our finances and our peace, are somewhat connected? That’s the reason why it’s important.
Financial literacy is a really important and amazing tool to guide kids and youth to success in the financial sector. Here are some benefits of financial literacy in kids and youth-
Students who learn to manage their finances early and often become adults who are better equipped to live independently.
Teaching children about money and its usage can help them understand the value of money and how prices reflect the value of goods
I was curious about the story behind how Svatah: came to life, and Dr. Santosh, who was a Teach for India fellow shared just that-
“A kid fell and broke his leg while playing. His parents turned to us (teachers) for help. I was shocked to learn that a man who earns a handsome amount is not able to manage a healthcare emergency. With deeper interactions, I understood that many of the parents earn decent amounts of money. This made me wonder if the parents aren’t earning ‘enough’ or if they aren’t able to ‘manage’ their finances. Upon reflection, I realised that I am making them weaker and more dependent by offering a ‘temporary solution’ for a long term problem. Kids were learning from what they saw their parents do, so this was setting a vicious cycle of which was a humongous challenge. So, to make this right (or at least attempt to) I started Svatah:, which is a Sanskrit word for “Self-reliance”.”
However, Svatah: has also had its setbacks–
“Every stage of being an entrepreneur, it’s a challenge”, says Dr. Santosh. “This organisation was a non profit organisation, so it was really hard trying to find the right way to fund our idea and build on it. We call it the ‘chicken and egg problem’. People want you to show impact to get funding, and without funding you can’t show any impact. So we often felt like we needed one thing to get the other thing. And as Svatah was a non profit organisation, we didn’t fundraise for a long time. So operating the idea without that amount of money was really a challenge.”
Even though financial illiteracy is a problem we can’t solve really quickly, small steps will definitely make a big change in how we look at money.
Dr. Santosh also shares his advice for financially illiterate people, both in India and around the world–
“Don't count your chickens before they hatch. These people spend a lot thinking that next month I'll get a salary. I'll take a loan from a loan shark or a loan from a bank. People in general are spending money that they don't currently have because they believe in the future that it's very certain. I'd say that should not be the case, but conversely, they should actually save more rather than spending more and save money, which they might need for emergencies later on.”
Financial literacy. After reading this article, what comes to your mind now?
Do you see a ray of hope, a silver lining in a grey cloud, a way where children, youths and adults can learn how to manage money effectively?
And, Svatah: Education Foundation is just one of the many ways we can introduce ourselves, as children– and adults, if need be– to financial literacy. It also has many benefits, and, as money is a huge necessity in today’s times, having a sense on how to manage money is an essential skill. So, let me remind you again- do children have the potential– and the patience – to learn about financial literacy? You decide!
Written by Vaidehi Pant
Vaidehi is an enthusiastic study-lover by day, and an author/reader by night. She loves to dance, draw, write, swim and do internships :). She lives in Greater Noida with her family.