Financial Literacy for a Better Tomorrow

According to the Wiley Online Library, “Financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being." Sounds pretty useful, right? But how do we learn financial literacy? And when should we start? 

By: Khaliff Haned

In this article, I want to share something very important: financial literacy. According to the Wiley Online Library, “Financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being." Sounds pretty useful, right? But how do we learn financial literacy? And when should we start? 

I believe that financial literacy must be taught by parents at home and not too often rewarding children with materials as it will create the mentality of "What do I get in return” for everything they do. Also, financial literacy must be thought in school starting from a young age as it will cultivate a healthy mind and energy. 

Let me explain. First, parents are the role models for their children especially when it comes to money matters. Children observe how their parents spend, save and budget money every day. They also learn from their parents' attitudes and emotions about money. If parents are stressed, anxious or secretive about money, children may pick up on those feelings and develop unhealthy money habits — or worse, develop a fraudster in the making. On the other hand, if parents are open, confident and responsible with money, children may learn to be the same. That's why I think parents should practice learning at home by involving them in financial conversations, sharing positive stories, giving them an allowance and guiding them to set financial goals. Parents should also avoid rewarding their children with materials every time they do something good because that can create a sense of entitlement and dependence on external rewards, which can lead to corruption. Instead, parents should praise their children for their efforts and achievements, and teach them the value of hard work, gratitude and generosity. 

Secondly, I think financial literacy should be implemented starting at pre-school in so many fun and interactive ways, like creating a simple song or jingle or via storytelling because children's brains are more receptive and adaptable at that stage. Research shows that financial education can have a positive impact on a student's financial knowledge, attitudes and behaviors. Financial education can also help students develop critical thinking, problem-solving and decision-making skills that are essential for life. That's why I think schools should offer simple, fun modules and interactive activities to teach students about basic financial concepts such as income, expenses, savings, investments, credit, debt, taxes and insurance. Schools should also provide opportunities for students to apply their financial skills in real-life situations, such as setting up a lemonade stand, selling cookies or managing a classroom budget. Schools should also encourage students to take part in financial literacy competitions or clubs where they can learn from their peers and mentors. Thus, they are growing up positively as an individual and professionals with integrity. 

By teaching financial literacy at home and in school starting from a young age, we can equip our young leaders with the tools and mindset they need to face and overcome the challenges ahead. Financial literacy can help them achieve their personal and professional goals, prepare for emergencies and contribute to society. Financial literacy can also help them live happier and healthier lives.