How financial illiteracy holds back university students

Making poor financial decisions at an early age can result in grave consequences. Many students begin university around the age of 19, and from then, they often have to make big decisions regarding savings, return on investment for their education, business ventures, student loans, and more. 

As a result, they might face challenges like not having a good savings plan, choosing a university without thinking about whether it's worth the cost, failing to start a business due to lack of financial knowledge, or even dropping out because they don't know how to pay for their education. This can lead to a future with no savings, heavy debt, missed opportunities, and not earning a degree they were capable of achieving.

Hard-working students start earning money at an early age by tutoring. Nowadays, there are more options for earning money. Even smarter ones often take up part-time jobs against societal judgment. In today's technologically advanced era, freelancing is also a good source of income. 

It is high time adults ask themselves: How different could their lives be if they had the financial knowledge they currently possess at an early age? Personal finance goes beyond shaping the overall economy of the country. Therefore, it is a responsibility to help the younger generation become financially literate.

However, even with all their hard work and effort to balance studies and work, many students still struggle to save money. A lack of financial knowledge makes them more likely to overspend, confuse "needs" with "wants," invest without understanding the difference between assets and liabilities, or avoid using formal financial services. These habits can lead to poor financial situations in the long run.

According to UGC reports from 2022, around 3.41 lakh students enroll in private universities. While the cost varies, the average cost of attendance is still significant. Therefore, choosing an institute without proper research on return on investment is concerning. 

What will be the total cost, including transport, housing, and more in addition to tuition fees? After graduation, what is the average starting salary of the alumni? With proper financial knowledge, these are the questions they would seek answers to, before enrolling. Otherwise, some may regret certain choices when it's too late.

On the other hand, some students might discontinue their education midway due to financial hardships. This may result from not knowing about student loans and other financial services. 

Several institutions provide student loans, and different NGOs offer need-based aid to students. The options are mostly catered to students' needs. Therefore, not being aware of them keeps students away from education despite academic prowess. Knowing about them would be the first step in looking into several available options and then making appropriate choices based on their situation.

Moreover, innovative young minds are studying at universities. They may have business ideas that could result in success stories. However, a lack of financial literacy would keep them from starting such ventures. With proper knowledge, they could reach out to investors or take startup loans. With a better understanding, it would be easier to start their entrepreneurship journey at an early age. Without it, their dreams may remain unfulfilled, leading to a loss of potential.

Lack of financial literacy also results in hesitance to join formal financial services. Students often do not open bank accounts for fear of not knowing enough. Factors such as interest rates and other bank-provided facilities are hard for them to understand when it comes to comparing and choosing banks. Often, upon graduation, when they join the workforce, their salary is sent to bank accounts. Not having one prior results in rushed decisions and other issues. 

Moreover, in recent times, there have been several innovation hubs, startup competitions, and more arranged for university students. To pursue their dreams further, grants are usually sent to joint accounts of all members. Without adequate knowledge, there is room for confusion.

Therefore, students must be financially literate from an early age. Many banks and other financial institutions provide courses on it. There are several free online resources as well. High school teachers may play a role in this. They may encourage students to actively seek financial knowledge from an early age. Teachers may also explain the need for financial literacy. 

It is high time adults ask themselves: How different could their lives be if they had the financial knowledge they currently possess at an early age? Personal finance goes beyond shaping the overall economy of the country. Therefore, it is a responsibility to help the younger generation become financially literate.