Teaching children to manage money

Can lessons on the value of money make children better money managers? Sreerekha Kaimal writes on two courses that aim to create financial awareness among the school-going youth

Thirteen-year-old Neel’s demands for branded clothes, branded shoes, even branded inner-wear are met without a second thought by his parents.

Once a week, eating out and video-game pleas too are taken care of. But on the first of every month, there is whispering and whimpering for more pocket money, reeling out names of his friends who are getting more and how their parents are more considerate.

This is the case with most children today. They have a lot of information and knowledge on almost every subject except money matters. As far as value for money is concerned, they hardly have a clue  as to how it comes and goes. And, now experts have actively begun thinking of the concept of financial literacy, which will help children understand that money supply is limited and they shouldn’t feel bad if their parents deny them some luxuries.

On a directive from the Securities and Exchange Board of India (SEBI), India Infoline limited (IIFL) has designed and launched courses to give students a peek into money matters. The IIFL, under its programme called FLAME  (Financial Literacy Agenda for Mass Empowerment), has launched a Financial Literacy Certification Course called FIN-LITES for the students of Classes VIII, IX and X across the country.

This course helps in laying the foundation for a sound financial future and prepare students to face financial problems better as adults. Amar Ambani, head of Research, IIFL says: “The current academic syllabus is very scholastic with little focus on money management.

The course only seeks to introduce students to the basic principles of money, credit and investments; not to talk about complex financial structuring or derivatives. We wanted to begin with school children since the earlier we start, the more deep-rooted the concept remains. The emphasis is on unfolding knowledge in a non-linear and vivid manner, and sans jargon.”

The student workbook has been compiled after research and articulation on how money should be introduced to school children. Techniques like story-telling and do-it-yourself exercises have been used to elucidate the theory. “We have taken all efforts to ensure that FIN-LITES doesn’t turn out to be a burden for students over and above their regular syllabus,” Amar adds.

The courses are conducted free of cost in most schools, including the Kendriya Vidyalayas. “Only for a handful of cases, we have charged a token amount of hundred rupees, on the request of the school, only to instill a sense of purpose among students and parents.”

Understanding that education and financial literacy are imperative for effective financial inclusion, students are given one to two months study time and an exam date is set at a mutually convenient day, based on discussion with schools.

Other similar courses

Federal Bank too has a similar programme where workshops are conducted in schools. Minimole Liz Thomas, Chief Manager (Agri and Financial Inclusion Department) says: “We conduct financial literacy and education programmes in several schools with the focus on government-aided higher-secondary schools. These classes help in providing basic banking concepts to school children.”

“Taking a cue from the Reserve Bank of India, which has emphasised the need to impart financial awareness among school children, we now conduct financial education programmes through workshops in various higher secondary schools.

Students are introduced to the world of money through comic and picture books so that the concept is easily inculcated in them and they can put them to practice in their daily life,” she adds.

Teachers too feel the course will help students to have a better understanding of how money is earned, spent, and needs to be saved at an early age.

Amrita Gulia, a teacher at Kendriya Vidyalaya, says: “Due to tremendous improvement in science and technology, children’s accessibility to information is quicker. Hence, it is the right time to learn about money management. The subject will help them appreciate the value of money in their lives, so that they are better equipped to manage their financial affairs effectively in future.”

Another teacher, Mini Rachel of Mount Carmel Anglo Indians ISC School feels, “The students get an overall understanding of the value of money, how it should be judiciously used and above all, it creates an awareness.”

Since the content is explained in a simple manner and easy to understand language, students can easily comprehend, she adds.

Students too have found the subject interesting. Aparna, a student of Mount Carmel Anglo Indians ISC School says: “My knowledge about managing money was poor and I found it difficult and uninteresting. But this course has changed my view.”

Making use of this course, a number of children are learning to handle money better and plan their financial future in a better manner.