Financial literacy curriculum void

By Aryan Puri, Founder, Plutus – The Finance Club

India’s education system presents a stark contradiction for Generation Z. This digitally native generation—comprising over 52% of the population—is navigating complex financial concepts such as UPI, cryptocurrency, buy-now-pay-later schemes, and gig economy work from an early age. Yet, when it comes to formal education, the classroom experience is critically lacking. Financial literacy, if taught at all, appears only as a basic introduction in Grades 11 and 12, and even then, only for students in the Commerce stream. Those pursuing Science, Arts, or Humanities often graduate school without any exposure to financial education.

Gen Z’s Financial Reality vs. the Classroom Void

Gen Z’s financial landscape is shaped by digital payments, instant gratification, and a multitude of tempting financial options. While many in this generation begin saving and investing early—BCG reports that over 60% save consistently and 35% invest before age 25—a SEBI study reveals that over 30% of young investors rely on unverified advice from social media.

This paradox—being proactive yet vulnerable—highlights a glaring need for structured financial guidance. Unfortunately, the Indian education system fails to offer such support during the formative years. The notion that financial education is only relevant to commerce students is not only outdated but also dangerously exclusionary.

The Missing Foundation: Behavioural Finance and Life Skills

The limited financial curriculum offered in senior secondary commerce typically focuses on technical topics such as interest calculations, theoretical tax structures, and rote definitions. However, it ignores the psychological underpinnings of financial decisions—insights that are crucial for everyone, regardless of their academic path.

Key questions that go unaddressed include:

How does peer pressure fuel impulsive spending?
What role do cognitive biases like overconfidence play in risky investments?
How do emotions influence our saving and spending behavior?

By omitting these aspects, the system deprives students of essential tools for real-world decision-making.

The Cost of Ignorance: More Than Just Numbers

Delaying and restricting financial education comes at a high cost:

Lack of Delayed Gratification: In an age of instant access, students are rarely taught to prioritize long-term security over short-term pleasure—particularly outside the Commerce stream.
Susceptibility to Exploitation: Without a grasp of basic concepts like risk, return, or marketing psychology, Gen Z is vulnerable to predatory lending, get-rich-quick scams, and impulsive financial decisions driven by FOMO.
Mental Health Impacts: Poor financial literacy often leads to anxiety over debt, burnout from side hustles, and shame from financial mismanagement—contributing to declining mental well-being.
Investment Paralysis or Recklessness: A lack of knowledge may cause either total inaction—missing out on compounding benefits—or speculative behavior driven by social media hype.
Life Skills Gap: Vital skills like understanding insurance, managing UPI and digital apps securely, filing basic taxes, or budgeting are absent from most students’ education.

The Imperative Shift: Making Financial Literacy Universal

To bridge this gap, India must reframe financial education as a universal life skill rather than an elective subject. Key changes include:

Early and Inclusive Introduction: Make foundational financial education compulsory for all students starting in Class 9, across all academic streams.
Emphasis on Psychology and Behavior: Move beyond calculations to explore needs vs. wants, emotional spending triggers, cognitive biases (e.g., confirmation bias, loss aversion), and the importance of delayed gratification. Use reflective prompts like, “What emotions do I feel when I save or spend?” to promote deeper understanding.
Hands-On Simulations: Incorporate practical exercises such as managing a simulated monthly budget, responding to emergencies, comparing loan options, and building mock investment portfolios. Use case studies on topics like student loans or starting a SIP to make concepts relatable.
Digital Financial Tools and Safety: Educate students on UPI, digital wallets, online banking, and basic investment platforms (mutual funds, stocks), with a strong focus on cybersecurity and fraud prevention.
Core Protections and Tax Literacy: Demystify insurance (health and term life), and explain the fundamentals of risk management and taxation, including income slabs, deductions (e.g., 80C), and TDS.
Empower Educators: Equip teachers with modern training in financial literacy, behavioral economics, and practical application to effectively guide students beyond textbook theory.

Conclusion

India’s current approach to financial education is not just insufficient—it’s exclusionary and outdated. By relegating basic financial knowledge to a select group of commerce students in Grades 11 and 12, the system leaves the majority of Gen Z unprepared for an increasingly complex financial world.

Financial literacy must be recognized as a foundational life skill essential for survival, empowerment, and well-being in the 21st century. All young Indians deserve access to the tools and critical thinking skills needed to make informed financial decisions, avoid exploitation, and build secure, fulfilling futures.

The time to close this curricular gap is now.

Also Read: Preparing students for globalisation