— (Aryan Puri is the Delhi-based Founder of Plutus — The Finance Club)

Delaying financial education until late adolescence, and restricting it to commerce stream students exhibits deep myopia about real-world consequences for the majority of adolescents and youth

Aryan Puri

India’s education system poses a significant danger to young people — especially millennials and Gen Z. Currently this digitally savvy generation, which constitutes more than half the national population is confronted with complex financial products and services such as UPI, cryptocurrency, EMI schemes, and gig work from early age. However, their formal classroom experience falls woefully short in preparing them to manage latter-day financial instruments. Most students are not schooled in  foundational financial literacy until classes XI-XII, and even then only those who opt for the commerce stream. High school students in science, arts and humanities are left to their own devices.

In a financial environment replete with digital payments, rewards, and enticing options, over 30 percent of young people despite their tendency to begin saving and investing early — according to a Boston Consulting Group report over 60 percent of youth start saving and investing before age 25 — depend on unreliable social media advice.

Delaying financial education until late adolescence and restricting it to the minority of students reading commerce exhibits deep myopia about real-world consequences for the majority of youth. Among the consequences:

Ignorance of delayed gratification. In the new digital world which encourages impulse purchase behaviour, learning about long-term security over short-term wants, is neither taught nor learned by non-commerce students, and only tangentially addressed in higher secondary commerce programs.

Vulnerability to exploitation. Unschooled in basic concepts such as risk, return, marketing psychology, young citizens become vulnerable to predatory lending practices, get-rich-quick schemes, impulsive spending driven by FOMO, and expensive credit dependency.

Mental health burdens. Financial illiteracy generates anxiety over debt, stress from unmanageable side businesses and sentiments of shame associated with inadequate money management — all of which affect overall well-being.

Investment paralysis and/or recklessness. Ignorance can result in either total inaction (thereby foregoing the benefits of savings and compounded growth) or reckless speculation fueled by herd instinct rather than fundamental money management principles.

Life skills deficiency. Adult responsibilities — understanding health and life insurance, navigating UPI apps securely, grasping fundamental tax principles, or drawing up simple budgets are alien concepts for most school-leavers.

To address widespread youth financial illiteracy, a sharp upgrade in senior school curriculums (classes IX-XII) is overdue. Financial literacy should no longer be an optional subject restricted to commerce students in their late teenage years. It needs to be introduced as an essential life skill for all students class IX upwards.

For school managements and faculty the best way to introduce financial concepts from senior school onwards is by:

Focusing on psychology & behaviour. School curriculums need to teach teens to differentiate between needs and wants; manage emotional spending impulses; recognise cognitive biases such as confirmation bias and loss aversion; withstand peer pressure and appreciate the value of delayed gratification to practice the savings habit from their teenage years.

Practice of relatable simulations. Teachers need to introduce students to monthly budgeting involving income and expenditure, practice emergencies management, evaluate differing loan alternatives, and encourage them to manage simulated investment portfolios.

Introducing digital & modern tools. Schools need to teach students safe and effective use of UPI, digital wallets, online banking, and the basics of recognised investment options (mutual funds, stocks) as also digital security safeguards and protection against cyber fraud.

Introduction to core protections. Educators should demystify basic insurance (health, term life) and explain why risk coverage is important for financial security. Curriculums should also teach fundamental tax concepts relevant to young earners — income slabs, TDS deductions, GST etc.

Empowering educators. Institutional managements must invest in teacher training focused on contemporary financial literacy, behavioural norms, and practical applications to bridge the gap between textbook knowledge and real-world financial realities.         

The current system of teaching financial literacy is not only deficient but also inherently exclusionary. It is restricted to commerce students in higher secondary classes, with the result that a large number of Generation Z children are left struggling within a complex financial landscape. Finance should not be an optional subject reserved for aspiring accountants; it is a crucial life skill necessary for survival, well-being, and empowerment of all young people in the era of the internet and digital transactions. This void in school curriculums needs to be addressed urgently.

Also Read: Action plan for bridging India’s yawning skills gap