Why Financial Literacy Should Be Taught in Schools

Why financial literacy should be taught in schools
There’s more to financial literacy than just knowing how to make wise financial decisions. It’s
more about being able to use this knowledge and apply it to everyday scenarios. Financial
literacy affects every aspect of our lives: from creating budgets, to saving, to taking out a loan,
and investing. However, many students do not know or have less exposure to financial literacy.
What is finance?
Before you can begin to understand financial literacy, you first need to know what finance is.
Finance is the management of money. There are several concepts that make up finance
including saving, investing, budgeting, and borrowing.
Finance can be divided into three main categories:
1. Personal finance which is how an individual deals with their money and includes
banking, the purchase and use of financial products such as credit cards and investing.
2. Corporate finance is any financial decision that is made to run a business such as the
issue of stocks.
3. Public finance is used to care for the welfare of the public and includes budgeting,
taxing, and the drafting of fiscal policies.
What is financial literacy?
In a nutshell, financial literacy is being able to manage your money wisely. Financial literacy
involves knowing and using the basic concepts of financial literacy. As mentioned above, these
include saving, investing, budgeting, and borrowing.
A good grasp on the different financial skills partnered with the ability to use them is key in
achieving your financial goals. With financial literacy, you can save up for retirement, purchase a
new home, or build a sizable estate for your children.
Why are more and more people financially illiterate?
According to the 2019 Financial Inclusion (FI) survey conducted by the Bangko Sentral ng
Pilipinas, only 55% of Filipino adults know how and why inflation directly affects the prices of
goods and services, while only 33% knew the correct answers on interest rates.
While some schools have begun incorporating financial literacy into their curriculums, the
process has been slow. This is why AAMBIS-OWA Party-list Rep. Sharon Garin has been pushing
for it to be included in all schools and educational institutions. According to Rep. Garin, House
of Representatives Bill 9058, otherwise known as the Savings and Investments Act of 2021, aims
to provide young Filipinos with the knowledge they need to begin long-term savings and long-
term investments before they even enter senior high school.
There are other reasons why financial illiteracy is on the rise. This stems from the lack of
exposure to financial literacy early on in life, which then trickles on to the next generations.
Children who have not been exposed to financial literacy topics in school grow up into adults
who do not have a strong grasp on financial literacy. They then become parents, bosses, or
teachers to the next generation of children, continuing the cycle.
What are the benefits of financial literacy?
Everything in our lives is affected by money. From our daily expenses to our children’s tuition
fees, building a retirement fund to saving up for a much-needed vacation, it is virtually
impossible to live life without money.
Having a strong foundation of financial literacy is important because it gives you the knowledge
you need to manage your money wisely. Without financial literacy, you may be making the
wrong decisions regarding how you save or invest your money. You’ll need to understand how
finances work so you can avoid incurring debt when using your credit card, take out a loan on
your first car, and grow your savings through investments.
Financial literacy also enables you to achieve your financial goals, whatever these may be. In
fact, financial literacy helps you determine what these goals are in the first place. Financial
literacy helps you manage your money wisely, make sound financial decisions, and achieve
financial stability in life.
On top of this, financial literacy also helps you get through the unexpected moments in life –
like a medical emergency or a sudden loss of employment. Knowing how to build an emergency
fund can provide you with a financial cushion in case the unexpected happens, while knowing
how to utilize the money you currently have is key to making it last as long as possible.
How you can improve your financial literacy skills
You can start building a good financial literacy foundation by reading up on the many articles
online that discuss the basic pillars of financial literacy (budgeting, debt, saving, and investing).
Metrobank has a collection of financial literacy articles that tackle various issues and concepts
you will need to know in order to make wise financial decisions.
After learning about them, you need to practice it by applying it in your life. This can start as
small as creating a budget or setting aside a percentage of your salary each month to build an
emergency fund. The more you apply financial literacy in your life, the better and more
confident you will be in your skills.
Conclusion
Financial literacy needs to start as early as possible, and schools should speed up the move to
incorporating it into their curriculums. With financial literacy taught comprehensively in schools,
students can acquire the skills necessary to achieve financial independence. As large numbers of
young adults are already deep in debt due to impulsive spending and lack of money
management skills, teaching them about budgeting, saving, and investing early on is not only
imperative but also urgent.
You, too, can help guide your child financially by teaching them how to save and budget their
money from a young age. Apply for a Metrobank Fun Savers Club account for your child today to
get started.

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