The Wisdom of Being Thrifty

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When Brainfeed interacted with some young people and teachers some surprising results showed that many children have already started their financial planning with the support of their parents’.Excerpts

Do you have a financial plan? If so, what is it?

Samarth: ( Samarth Gupta Cambridge-VIII, Maharaja Agarsain
Publicschool, Delhi )
I get pocket money or money to buy things from my parents.I save 25% of it for my future needs or for an emergency.Whenever my savings hit the bottom, then I increase the portion in a proportionate manner. I will continue it in future too.Harshini: Without any financial security it gets really hard to live our life as we grow older. Making money young may not be possible for everyone, but saving money young is a must-try.

Nirmayee: ( Nirmayee Chiplonkar X, St. Gregorios High School,
Chembur, Mumbai )
I have both short term and long term plans. My short term financial plan aims at saving enough money for my education. As for my long term, I aim at saving enough money to furnish a house for myself and meet other costs related to it.

Preksha: (Preksha Kataria X, Utpal Shanghvi Global School,
Mumbai )
As a student, I do not have a financial plan. At present,my aim is to share the burden of my higher education with my parents. To be successful in this,I deposit a portion of my pocket money into my saving bank account and carefully monitor my expenses.

Do you save money every month? If so,to what extent and how?

Samarth: Yes, I save money from my pocket money or the money that I get to buy things. I have a plan to continue it for another 5 months.For this,I maintain an accounts book to write the details of money saved during a week.

Harshini: ( Harshini.M IX, Meridian School, Banjara Hills, Hyderabad )  When I was ten,my mother put a piggy bank in my hand and asked me to save. Now,I have a plan. First I will limit my expenses and buy only those things that I need with my saved money.I would open a bank account that gives a good interest rate. I’ll make a realistic budget that fits both my short-term and long-term financial goals. I’ll save `500 a month and I’ll also save 25% from the amount that my parents give me to buy junk, which adds up to a good sum.

Nirmayee: I do save money every month. My parents helped me set up an account, at the Kotak Mahindra Bank, which teaches children the importance and advantages of saving money in a bank. It gives an interest rate of 6% p.a. every month, I deposit up to `5000 in my account. Preksha: The habit of maintaining my finances has given a clear perception of how crucial the savings are in a person’s life. This has allowed me to become a target saver – depositing a determined sum of money into my bank account every month.Saving money does not only mean saving into bank account but also spending wisely.

How can youth contribute for the economic development of India?

Samarth: The coming generation of any country would be the most important and decision making citizens of the country. If that generation would be law abiding,following government rules and schemes then it could spread awareness about rules and regulations by which there would be good binding between government and citizen.

Harshini: For a large number of us, the transition from education to employment will be ifficult. First, we need to help ourselves find our place in the job market. A great day at work multiplied by millions of employees, adding to hundreds of companies’ total production would result in a drastic change in the Gross National Product of the nation. Starting early, would definitely result in an expanded workforce and would be beneficial for us. For, stocks may rise, production will multiple and the demand for Indian goods will increase and slowly India will be a rich nation.Q All that is needed is investment in health,education and raining of individuals to make them assets for the nation.

Nirmayee: The youth should aspire for higher education, which can ensure that they can be better placed in the future. They should be innovative and support the ‘Make in India’ programme.The youth should encourage and invest in start ups. They should be responsible citizens and pay their taxes on time and should contribute funds whenever possible for the uplift of the poor in the society.

Preksha: India, being the second highest in terms of population has the maximum labour force having the potential to increase GDP and economic development manifold. But its strive to compete with the economically strong nations is only possible if the youth take a step forward to develop their skills and knowledge. Determined and focused youth can positively contribute by investing their ideas and money in their own country rather than being attracted towards foreign products and outlooks. Progress cannot be achieved alone, but with the combined efforts of the community. Focusing on the issues, youth can adopt rural villages and provide basic necessities to the villagers, start street schooling, visit NGOs and also donate funds in orphanages for better vocational training of unprivileged children. This would result in an increase in the standard of living of families and break the vicious circle of poverty and slow growth in the economy.

Teachers Interviews

Should students be taught about savings and investment from school days?

Sudha ( Bharathiya Vidyabhavan, Hyderabad ): In our country our lessons start at home informally. As the child demands, the mother justifies according to the situation. At school, the teachers narrate the stories and send a message to limit their wants. The first basic lesson of saving money and resources is learnt. I insist that lessons on financial literacy should be imparted at a very young age
as India is blessed with resources and as well the population, which is not proportionate.

Richa ( KIIT World School, Delhi ) : It is important to teach students on savings and investments from the beginning itself. Anything that is learnt at an early age makes a permanent place in one’s character. With their pocket money, when we see kids allocate money to buy anything, we actually see a finance manager in them.

At what age should financial literacy be taught to the students?

Sudha: We don’t attach finance to every aspect but the core concept behind financial literacy should be “live and let live”. This will ensure the principle of sustainability. The idea to save should be taught in a thoughtful manner.

Richa: Financial Literacy should start at an early age. Parents must let their children handle small financial transactions. By doing so, the child will practically implement the concept of addition and subtraction. It is pertinent that they should be made aware of the budget of their monthly household grocery items. This way, they would be able to understand the concept of finance as well.

How can students become more thoughtful about using the money?

Sudha: Being a commerce teacher, I believe in learning by doing. Every year at Bhavan’s, we organise different marketing events for different age groups like vegetable market, food court and Diwali Mela. With this, there is a scope of healthy marketing and hidden business techniques promoted individually. Finally, they learn how much they spent and earned as
profit. This enhances their life skills, business skills, communication skills,confidence, and self esteem.Above all learning should be a pleasure and not under pressure.

Richa: Students must be given some autonomy in deciding where to spend money. Giving a practical platform to them where they are the problem solvers will definitely help them in becoming more thoughtful. At KIIT, we made a business club, where students participated in a student-run business enterprise challenge. The task was to establish a business in school and earn money. Right from business idea to business plan and then actually running the business from zero capital was a challenge. Students came up with a brilliant idea of pre-selling using coupons. They reinvested the profit, made more money and the cycle went on till they made huge profits. For this business, they received 2500 USD prize money from Teach a Man to Fish, a UK based NGO.

What practices can the school management ensure for guiding the students in saving the money from young age?

Sudha: The school has an important role to play while imparting the objective of financial literacy; it creates a platform for bringing different ideas designed for different age groups and exposes them to various aspects of life skills.The values are spirit of inquiry, team spirit, decision making, fostering the spirit of using resources judiciously.

Richa: The school management has the onerous task of moulding the students’ thinking in such a way that they become responsible in each and every endeavour of theirs. The school should involve students in fund raising activities for good cause through which they can realise to help the underprivileged section of society. And last, but not the least, they should be given freedom to organise events on their own to help them in micro planning and saving for future use.

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