Financial education

Have you heard of the term “financial education”? Nor have I. A google search term brings up a few links that talks about federal agencies, financial aids and some sophisticated terms that a layman would loathe to consider. And these are centered around US only.

But why are we concerned? Do we have enough money that we need to plan? I would say that a proper plan is necessary for anything and everything, even if its going out to watch a movie..but there is nothing called movie education!! Then why financial education in the very place? We are not bankers!

A financial education is as important as the need to know the road signs. The other option is to stay cocooned in your own world, without any concern of what’s going on around you. Stock Markets? That’s a gamble! Mutual funds? I don’t understand..

Today’s India cannot afford to live without financial education. The presence of ubiquitous promising you the world, insurance policies that will secure your post-death experience (wow); loans that will make you a home owner (???), car owner (!!). A result of this is that the fine print is skipped, misunderstood, leading to hassles, cries and problems all over.

The fault likes with India’s education system. While we were young, we got the impression that having money is “bad” and being rich is akin to looting the unprivileged. Being poor was “cool”. Watch the hindi movies of pre 80s, you will get the hint. India was grappling with the communist philosophies that didn’t allow growth for 4 decades post independence. Communism failed, and high fiscal deficit forced India to open up, and changes have been happening ever since.

India’s financial system got more sophisticated, and NSE is now the world’s third largest stock exchange in terms of volumes. But the sophistication is centered on the people in the financial arena (who make sure others didn’t understand them). Today most people fail to comprehend the basics of finance, but they deal with money every day. (Remember the high rates of interest charged by the money lenders a couple of decades ago, today they have assumed the form of credit card institutions, notably banks).

Financial education must be imparted at a very early age. I hardly had any idea till I actually handled my own money (that was just because I put in some effort to understand). Many in my workplace still don't! In India, even today, money is considered sacred (and any manipulation of money a heinous crime). Children are never taught how to handle money.

With India going forward, it is only imperative that the intellectual levels of the mass has to increase. Schools should take initiatives to increase the level of awareness, for as they say “catch them young!”.