Why Indian students need real-world financial education from an early age

India Today

3 days ago

How many of us have watched our parents scramble to find a CA during tax season or seen them struggle with basic financial decisions like choosing the right insurance policy or understanding mutual funds? Perhaps we've even found ourselves in the same boat, calling up relatives for advice on filing the ITR or feeling overwhelmed by the maze of investment options available today.advertisementThis scenario plays out in millions of Indian households every year. Despite India's rapidly transforming and digitally integrated economy, most of us, including our parents, navigate financial decisions with limited knowledge and a lot of anxiety.The irony is stark. While we are witnessing unprecedented economic growth and digital financial innovation, most Indian students complete their education without any meaningful exposure to practical finance. They graduate knowing complex mathematical theorems but struggle to understand concepts like EMIs, credit scores, or even basic tax planning.
This gap between academic achievement and financial literacy not only weakens the foundation of India's future workforce but also perpetuates a cycle where financial decisions remain a source of stress rather than empowerment. This gap needs to be filled, and it starts with school education.Pratham Barot, CEO & Co-Founder of Zell Education, highlights why Indian students must learn real-world finance early. In India, many young adults step into life with academic knowledge but little financial awareness, leaving them unprepared for crucial decisions.BRIDGING THE FINANCIAL AWARENESS DEFICITFinancial literacy remains low in India despite economic advancements over the years. According to a Reserve Bank of India survey, financial literacy in India stood at 62.6% based on knowledge, behaviour and attitude. This gap in knowledge has many real-life consequences, such as a high credit score or zero know-how on how to set a long-term financial goal.One needs to be street-smart to handle real-world situations and that is only possible if they are exposed to financial education from an early age. Incorporating topics such as how to make informed decisions around savings, spending, borrowing, the risks and rewards of various investment instruments, the impact of inflation, taxes and insurance are something that one must know.IMPORTANCE OF EXPERIENTIAL LEARNINGCreating awareness about financial education should go beyond textbooks as it is most effective when it feels real, when students see how decisions affect outcomes, even in controlled environments. Various simulations like mock stock markets, budgeting exercises, or student-run enterprises are great ways to enhance retention and interest.While several private institutions in India are already taking this initiative seriously, mainstream adoption across all socio-economic backgrounds is the way forward to build a financially confident nation.
EMPOWERING TEACHERS BY TRAINING THEMOne of the biggest barriers to financial education is the lack of trained educators in the country. Without proper training, even a well-designed curriculum can fall flat. In such a case, it becomes crucial to invest in a structured teacher training program that covers both content and pedagogy. A simple step of equipping educators with the right tools to simplify complex ideas and relate them to students' lives can turn classrooms into incubators of financial awareness.FINANCIAL LITERACY TO FINANCIAL RESPONSIBILITYAchieving financial literacy at an early age can shape their mindset and not just teach them how to handle money. Students who are financially aware tend to show greater self-discipline, long-term planning, and critical thinking. These traits extend beyond money matters, influencing academic choices, career planning, and even personal behaviour.So, whether it's resisting one's impulse purchases, avoiding student loan traps, or understanding the long-term benefits of compounding, financially literate students are smarter and make practical life decisions. It also helps them navigate life's uncertainties and seize opportunities that align with their goals.advertisementFOUNDATION OF A STRONGER ECONOMYTo become a global economic leader, India needs to rely on its youth. It's important to empower them with financial knowledge, as it is not just a personal benefit, it's a strategic imperative. If every student leaves school with a working knowledge of personal finance, India's next generation of professionals, entrepreneurs, and policymakers will be better equipped to fuel inclusive and sustainable growth.Financial literacy is about building a life of choices, resilience and opportunity. It's imperative for students to get exposed to real-world financial concepts. Awareness about finances will help them handle the demands of adulthood and schools must take the lead to make this possible. A nation that has integrated practical finance into everyday learning will create a generation that's not just academically bright, but also financially empowered.- Ends