Money BasicsManaging Money

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.


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.