'Financial literacy'
Why does the school system require classes such as math, English, and science, but not basic things that everybody needs in their personal life? We force students to learn algebra, trigonometry, calculus or chemistry and physics, yet how many of us ever use it again after graduation? In contrast, how many transactions involving money will we each conduct on a daily basis for the rest of our lives? Think about each time when we purchase something with a loan, or pay taxes. Even though these transactions are common, we receive very little financial education on them from our school system, or even our parents, colleagues, and others. Now, it is not uncommon that we apply for a loan to buy a flat or car, or to buy an insurance policy, or opening a BO account, apply for IPOs, or buying and selling shares. How do we expect to make wise financial decisions when we have little education on even the basics?
These are some questions creeping up all the time in my mind, but I feel energised when I read the editorial piece 'You are what you study' written by a senior journalist Syed Fattahul Alim that appeared on 17th May 2010 in The Daily Star. While the writer has touched other important issues, esp. the need for the students to get technical education to suit job market requirement, rather than obtaining higher general education, I would like to discuss the need to get financial education for all that we all need really all along our lives. We need to recollect no further than the daily news headlines about the mortgage related problems in the USA two years back, the stock market crisis, and how big investment banks were collapsing, or the rising cost of food and oil to see how relevant financial literacy is. Just 20 years ago, personal finance was significantly less complex than it is today, and in many cases, parents supplemented what the schools did not teach. Fast forward to present day, and we now have many options. But because of their own financial woes, in many cases, parents are no longer comfortable with talking to their children about the touchy subject of money and personal finance.
Much has been done to bring awareness to other growing crises such as the dangers of drug abuse, but why has something as important as financial literacy been largely ignored? These are basic pieces of information that are critical to financial decisions. And the better job we do of financially educating the next generation, the more financially independent they will be.
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