June 7, 2021
Money management is a complex subject, and its discussion may make many of us feel uncomfortable.
Many people are struggling financially in this Covid-19 time. But, money is an integral part of everybody’s life. Hence, this topic cannot be avoided for a longer time.
According to a survey conducted, over half of the population is has financial concerns and is worried due to financial issues. Financial worries invite anxiety and depression as a consequence which needs to be tackled in an effective manner.
To avoid any anxiety, it is essential to ask the cause of your concern and how to deal with it.
Financial issues are the significant contributors to mental health issues. Observing the current pandemic trend, mental health issues due to financial instability are on the rise.
Hence, it is essential to understand the root cause and address it appropriately.
One of the reasons for this problem is the lack of financial education in people, making them mishandle the finances and lead to financial instability.
Our schools and education system do not focus on financial education, which is a big reason for financial illiteracy.
During childhood, there are no financial lessons taught, and suddenly, there comes the responsibility of managing finances when the child enters its youth stage.
The only answer to this sudden financial burden is to impart financial education from the beginning of childhood and understand the importance of handling finances.
The WHY to financial education
Looking at the growing importance of money management and budgeting, few financial topics were added to the curriculum to introduce the basics of finances to children.
Some of the essential topics include investment, savings, pension, debt management, insurance etc. However, since it’s a new introduction to the curriculum, teachers may also not feel confident in imparting financial knowledge due to the complexity of the topic.
Making financial literacy a part of the curriculum has its problems that have to be overcome in the future years. For example, different religions have different relevance of financial concepts.
Hence, there can be a difference in the teaching approach of the teachers. Financial literacy should be a universal concept. Many subjects have less significance in real-life situations.
Instead, financial literacy can be a part of the national curriculum as it provides life skills required to attain a smooth life.
The WHY to financial education
Financial education is a complex life skill, and it differs from other subjects being taught in school and institutions. Recently, few schools are trying to make changes in their curriculum and promote financial education as their main subject.
One of the schools has followed an innovative approach of opening their own bank and dealing with ‘below-par financial literacy learning.
Despite the growing need for financial literacy, there is much opposition to the idea of introducing financial education in schools.
Many people are of the opinion that the parents have to impart financial knowledge to their children and not the school. It is said that parents can only teach the actual value of money to their children and not any institution.
Many schools still do not emphasize financial education and consider it as the last option.
Changes in the millennial era
According to research, it is seen that there are more significant gaps in financial knowledge in today’s youth.
There is a huge discrepancy in spending and savings patterns of today’s generation compared to their previous generations. Therefore, the idea of bug purchases seriously does not sync in with their ideology.
There is a massive gap between financial knowledge and the spending pattern. The basis of this discrepancy is the lack of financial education at a younger age.
Many millennials believe in earning more money as it may lead to lesser debt, which is not the case.
Due to financial constraints, such children borrow loans from the market that include the best student loans in Ireland, and there are many institutions that provide loans to the student to cater to their financial needs.
According to a survey, many teenagers want their parents to talk about finances and be open about money management and budgeting to pave the way for a financially stable future.
Considering the current scenario, hopefully, the future will bring more popularity of these financial concepts in the education system.
Also, these financial skills may prove to be invaluable lessons for these youngsters and make them more responsible towards their financial life.
Ways to ensure a child’s financial well being
- Start early- Introduce basic financial concepts to your child from a young age such, as saving and spending.
- Experiential learning- Provide your child some real-life learning by guiding them. One of the ways is to introduce the concept of pocket money and guide them towards balancing their saving and spending.
- Use everyday events- Use everyday events to educate your child. For example, introduce your child to the banks and opening an account and maintaining it efficiently.
- Role of parents- Involvement of parents in imparting financial education to a child can lead to success as parents can make their child learn through experiential learning and monitor their development at home.
Being financially literate provides the feeling of being independent. Once the child enters in youth phase, a financially educated can make his/ her own decisions and control their finances.
Many youngsters in Ireland who lack financial literacy get inclined towards borrowing loans. Although short-term loans are a good option to finance your expenses but paying back the loan is a burden and should be done on time to avoid any financial issue.
Hence, it is essential to educate your child about finances and make them independent and confident.