April 1, 2025

I. The Importance of Savings and Financial Literacy from an Early Age

By Nirmal Kumar Sen,
Mayo College Girls’ School, Ajmer.

In today’s fast-paced world, financial literacy is a crucial life skill that should be instilled in children from an early age. Teaching young minds about saving and managing money responsibly helps them build a secure future and make informed financial decisions. 

One of the most important aspects of financial literacy is the habit of saving. Encouraging children to save money, even in small amounts, teaches them discipline and the value of financial security. Whether it is saving pocket money in a piggy bank or depositing it in a bank account, these early experiences shape their attitude towards money management. Over time, they learn the significance of setting financial goals and budgeting their expenses. 

Understanding financial concepts early in life helps children develop a sense of responsibility. They become aware of needs versus wants, making them less likely to fall into reckless spending habits later. As they grow, this knowledge expands to include concepts like investments, interest, and the risks associated with financial decisions. A strong foundation in financial literacy prepares them to handle real-world challenges, such as student loans, credit management, and long-term financial planning. 

Moreover, financial literacy fosters independence and confidence. Young individuals who understand the value of money are more likely to make wise financial choices and avoid debt traps. It also equips them with the knowledge to build wealth and ensure financial stability in adulthood. 

Parents and educators play a crucial role in imparting these lessons. Simple activities, such as involving children in budgeting discussions or giving them allowances to manage, can make a significant difference. 

Poet Rahim Das says: 

“रहिमन निज संपति बिना, कोउ न बिपति सहाय। बिनु पानी ज्यों जलज को, नहिं रवि सके बचाय।।  

रहीम जी कहते हैं कि अपनी सम्पत्ति के अलावा मुसीबत में कोई सहायक सिद्ध नहीं होता।  

अर्थात् संकट के समय अपना ही धन काम आता है। 

रहीम कहते हैं कि संकट की स्थिति में मनुष्य की निजी धन-दौलत ही उसकी सहायता करती है।जिस प्रकार पानी का अभाव होने पर सूर्य कमल की कितनी ही रक्षा करने की कोशिश करे, फिर भी उसे बचाया नहीं जा सकता, उसी प्रकार मनुष्य को बाहरी सहायता कितनी ही क्यों न मिले, किंतु उसकी वास्तविक रक्षक तो निजी संपत्ति ही होती है। 

In conclusion, financial literacy and the habit of saving should be nurtured from an early age. These skills empower individuals to lead financially secure lives, make informed choices, and contribute positively to the economy.

II. The Importance of Savings & Investing at A Young Age 

A Hands-on Approach  

By Pratima Pai,  
Vice Principal in a private school in Bangalore. 

In today’s world, it’s essential for young people to understand the importance of financial literacy and savings. Recently, there was a big rise in stock prices after Donald Trump became the President of the United States. Many traders made huge profits, and it sparked a conversation about how financial decisions, like investing in stocks, can change lives. Just like Kushal, a class 9 student, who has developed an interest in stocks thanks to his uncle, it is crucial to learn about managing money early on. 

Kushal’s interest in trading started when his uncle, a stockbroker, taught him how to read stock charts and allowed him to practice mock trading. Over time, Kushal became really good at reading the charts and understanding which stocks to invest in and which to avoid. He also learned about the power of compounding, so whenever he received money as a gift, he would invest it through SIPs (Systematic Investment Plans), allowing his money to grow over time. 

Kushal then shared his knowledge with his friends, encouraging them to develop a similar interest in managing their money. This curiosity about finances led Kushal to ask his teacher, “Do you think financial literacy is important, and should it be taught in schools?” The teacher replied, “Yes, it is very important and should be taught in schools. When you are financially literate, you will make informed choices and invest wisely, which will help you live a better life. You’ll also be prepared to handle economic crises because you will have invested your money when you had it.” 

Financial literacy helps students not only manage their personal finances but also understand broader concepts, such as how banks and financial institutions work, the role of the Reserve Bank of India (RBI), and why it’s known as the Central Bank. It helps students learn about savings, investing, and how to avoid financial scams. Understanding these concepts can be empowering. 

At the same time, students can learn about managing finances through school events like farewells. For example, the responsibility of collecting money for the farewell party, keeping track of expenses, and making a budget helps students develop a practical understanding of how money works in the real world. They learn to make decisions about where to buy things within a budget while also learning important life skills. 

The introduction of skill subjects by the CBSE, starting from class 6, is a great step in preparing students for their future careers. Financial literacy is one of the skills students can choose to study, and it will equip them with valuable knowledge that can help in both their personal lives and future careers. 

Financial literacy also enables students to understand the economic growth of their country, GDP, and overall financial health. Reading newspapers like the Economic Times or financial magazines can further boost their understanding of the economy, savings, and smart investing. 

Teaching financial literacy at a young age is crucial. It helps students become responsible and wise when it comes to managing their money. Through skills education, students gain knowledge that will prepare them for the real world, ensuring they are equipped to make sound financial decisions and build a successful future.