Financial literacy for the next generation


equipping youth with money management skills

By Grace QUAYE

We were not thought financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate – Robert Kiyosaki

In today’s rapidly changing world, it’s important to teach young people how to manage money well. Knowing about finances helps them make smart choices and builds a strong base for financial stability and success. This article looks at why financial literacy is important for young people, the main parts of good financial education, and how to teach these skills to them.

Understanding Financial Literacy:

Financial literacy could be understood as “a person’s minimal knowledge about financial terms such as money, inflation, interest rate, credit and others, but besides this the abilities and skills of that person to use all this information in personal life, being aware about the consequences of it”.

According to S&P’s Global Financial Literacy Survey, African countries score the worst in terms of financial literacy in the world. The most financial literate country is Botswana at 51% and the least is Somalia at 15% according to the survey.

Financial literacy is vital to one’s financial success and that is why an effort has to be made to improve it and prepare Ghanian youth for the future. On the individual level, financial literacy helps one to budget, manage debt, and create a savings and retirement plan. In addition, managing debt and creating savings plans could help reduce household debts levels and take households out of poverty. Ultimately it will put Ghanaian youth in control of their money/finances. It will also allow the youth to confidently participate in the financial market and invest in products that match their financial goals.

The Importance of Financial Literacy for Youth

Economic Stability and Independence

Financial literacy is vital for achieving economic stability and independence. Understanding the basics of budgeting, saving, investing, and credit management allows young people to navigate financial challenges effectively. This knowledge helps prevent debt accumulation and promotes long-term financial health.

Informed Decision-Making

With a solid grasp of financial concepts, young individuals can make informed decisions regarding their personal finances. This includes making wise choices about student loans, understanding the implications of credit card usage, and recognizing the importance of saving for future goals such as higher education, home ownership, or retirement.

Reducing Financial Stress

Financial literacy can significantly reduce the stress associated with money management. When youth are equipped with the skills to manage their finances effectively, they are less likely to experience the anxiety and pressure that often accompany financial instability. This contributes to overall mental well-being and a more balanced life.

Key Components of Financial Education


Budgeting is a fundamental skill that helps individuals track their income and expenses. Teaching youth how to create and stick to a budget ensures they understand the importance of living within their means and prioritizing their spending.


Instilling the habit of saving is crucial for financial security. Educating young people on the benefits of saving, including the concept of an emergency fund and the power of compound interest, encourages them to set aside money regularly for future needs and unexpected expenses.


Introducing basic investment concepts can help youth grow their wealth over time. Explaining the principles of stocks, bonds, mutual funds, and retirement accounts provides a foundation for making informed investment choices and understanding risk versus reward.

Credit Management

Understanding credit is essential for maintaining a healthy financial profile. Teaching youth about credit scores, the impact of debt, and responsible credit card usage helps them build and maintain good credit, which is crucial for future financial opportunities.

Strategies for Integrating Financial Literacy

School Curriculums

Incorporating financial literacy into school curriculums ensures that all students receive a foundational education in money management. This can be achieved through dedicated courses or integrating financial concepts into subjects like mathematics and social studies.

Parental Involvement

Parents play a significant role in shaping their children’s financial habits. Encouraging parents to discuss money matters openly and involve their children in family budgeting and financial planning can reinforce the lessons learned in school and provide real-world applications.

Technology and Apps

Leveraging technology can make financial education more engaging for youth. Numerous apps and online platforms offer interactive tools and resources that teach financial concepts through games, quizzes, and real-life simulations, making learning about money management both fun and practical.

Community Programs

Community organizations and non-profits can offer workshops and programs focused on financial literacy. These programs can provide additional support and resources for youth, particularly those from underserved communities who may lack access to financial education in schools.

Stakeholders & Their Roles:

There are many stakeholders who play a huge role in promoting financial literacy on the continent. There are stakeholders such as Government agencies, Ministry of Education, Ministry of Finance, the Media, Securities Exchange Commissions, financial institutions, but the government plays the leading role. Beyond the government and government agencies, stakeholders such as the Media, Mobile Money Operators and financial institutions can all play a role in improving financial literacy.


Financial literacy is an essential skill that empowers youth to achieve economic stability, make informed decisions, and reduce financial stress. By incorporating comprehensive financial education into school curriculums, encouraging parental involvement, utilizing technology, and supporting community programs, we can equip the next generation with the tools they need to manage their finances effectively. Investing in the financial literacy of youth is an investment in a more prosperous and secure future for all.


The writer is a Doctoral Candidate, Chief Marketing Officer (CMO) and Investment Advisor, Ashfield Investment Managers. She can be reached on +233246152750, E-mail [email protected] or [email protected]

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