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CEO of Zerodha advocates for the basics of finance subjects to be taught as an essential subject in schools

by Riya Mishra

Date & Time: Jan 13, 2023 9:00 AM

Read Time: 3 minute



Introduction

Financial literacy is inherently aligned with profitability and growth. With the gradual and steady rise of the Indian economy, the discussion of being financially literate has grown from just being a normal societal conversation to business hour news debates where the most experienced business and investment minds have said their peace on making finance a compulsory subject to be taught right from the middle school. In a nutshell, most of the points put forward make more than just sense.

Nitin Kamath’s view on financial literacy from a young age and why it makes sense

Nitin Kamath, CEO of Zerodha, is a strong advocate for finance subjects to be taught as an essential education in middle schools across the country. In a recent interview with ET Now, he said: "I think financial literacy should be made compulsory in schools because it is not just about making money and investing; it is also about managing your finances well."

Kamath's statement makes a lot of sense. Financial literacy is critical for everyone, regardless of age or occupation. It teaches individuals how to make sound financial decisions, which can help them save money and avoid debt. In addition, financial literacy can help people retire with more peace of mind.

Advantages of financial literacy as a young learner

Financial literacy is a key concept which every all young individual should develop an interest for. Financial literacy teaches individuals how to manage their money and take necessary financial decisions. There are many benefits of knowing the how, the whens, and the whys of finance no matter if you are a high school or a grad student.

A much-needed benefit of being financially literate is wealth management. If you are in college and know how to budget your money and stay within your spending limits, you are less likely to burn through your essential savings, to put it simply. Financial literacy can also help you invest for a better, post-retirement future. If you learn how to set aside money each month, you will be better prepared for retirement or unexpected expenses.

Earning money the smart way is another crucial benefit of learning finance early in life. Once you understand compound interest, you will be able to make smarter investment choices, even when in college. Financial literacy also helps you to get the right job for you. Many employers look for employees who are knowledgeable about personal finance and have strong money management skills.

One interesting study done by visa found that 89% of parents who teach their children about money believe their kids are more likely to be successful financially as adults. Teaching your children about money at an early age will give them the knowledge to spend their hard earned money once they grow up with a more self-aware approach about the concept.

Financial literacy is key to creating empowered citizens who can make informed decisions about their finances. The importance of developing a basic understanding of financial concepts at a young age allows earning individuals from taking developing any bad spending habits and debt accumulation later in life.

There are multiple alternatives and ways to learn about finance and its related concepts. Some people prefer self-study, while others benefit from attending workshops or taking courses. However, the best way to learn is often through hands-on experience. This means trying out new things and making mistakes - something that's not always possible when learning about finance in a classroom setting.

Regardless of how you choose to learn about finance, it's important to have a basic understanding of key concepts such as budgeting, saving, investing, and risk 
management.

Conclusion

There is no question that Nitin Kamath's call for teaching the basics of finance in schools is admirable and necessary. Developing strong financial literacy skills is critical for all individuals, regardless of age. By learning about money management and investing at an early age, students can set take their first steps toward leading a more responsible life. If we start teaching our kids about money when they’re young, they’ll be more likely to stick with those habits as they get older. This can help them avoid costly mistakes down the road and ensure a healthy financial future.

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