Entrepreneur and youth icon Navya Naveli Nanda recently recalled her earliest memory of receiving Christmas presents from her paternal grandmother, Ritu Nanda. During a candid conversation with her mother, Shweta Bachchan, on her podcast What the Hell Navya, she shared that while other kids received toys and chocolates, she and her sibling Agastya used to get life insurance from their dadi.
“Every year for Christmas, dadi used to get me and Agastya life insurance. We knew every year she’d be like, ‘Guess what I’ve got you?’ and I would be like, ‘Life insurance. I have no idea what this means,” and she would tell me, “You’ll thank me when you turn 21,” to which her mother quipped, “Yeah, she would pay the premiums and everything.” “Sweet,” Jaya Bachchan chimed in.
Nanda’s thoughtful decision might have been surprising, but in the long run, it shows a mature approach towards financially setting up the kids of the family, offering them safety nets from the get-go. It also helps build an understanding of financial discipline in children from a young age, highlighting the importance of saving for the future.
Why is it important for kids to be financially literate?
Mukesh Pandey, Director of Rupyaa Paisa, told indianexpress.com that in this day and age, it is no longer a matter of choice — the essential foundation of understanding financial instruments is a must now.
“Having even a basic understanding of key financial instruments like Fixed Deposits, Mutual Funds, Public Provident Fund (PPF), Health & Life Insurance, National Pension Scheme (NPS), Share Investment Plans (SIP) will allow you to keep some control of your financial journey and decisions,” he said.
Understanding financial instruments is a must now (Source: Freepik)
According to Panday, India is still far behind in financial literacy. “A SEBI survey found that only 27% of Indians are financially literate. This suggests that almost three-fourths of our population may be investing without fully understanding where their money is going and what risk issues a particular instrument is associated with,” he shared.
Today, digital accessibility has already made financial products a click away, but with that ease of access comes responsibility. “Understanding how to benefit from compounding through SIPs, tax-saving opportunities through ELSS or PPF, or even knowing the difference between term insurance and an investment-linked policy can change your financial journey,” stressed Pandey.
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As children continue to grow older, he believes it is crucial to create awareness around money; ultimately, awareness is the biggest asset you could have. “Consider that simply making a habit of 15 minutes a week to inform yourself about a financial concept will change the game of financial understanding and ultimately planning,” he said, adding that “financial awareness is not about knowing all – it is about knowing enough and protecting your future”.
Running a household and managing finances is no easy feat. With double-income households becoming more popular by the day, having a streamlined plan to budget and invest helps share the burden equally among partners, while setting up your future generations for success. Read on for expert tips to help you ace the same.
