From salary to strategy: why universities must teach financial literacy

When I asked Shivi, one of our master of laws graduating students, how she planned to spend her first pay cheque, her answer was cheerful and immediate: “I’ll buy gifts for my parents, my brother and myself.” A month later, her tone had changed. “My salary feels too low,” she said, visibly frustrated.

What had changed? Not her job, nor her pay. What shifted was her understanding – how quickly money disappears without a plan. While financial inexperience is common among first-time earners across generations, today’s young professionals face an entirely different financial landscape: easy credit, digital investments, rising costs of living and increasing exposure to complex financial tools. They must face these realities with limited or no preparation.

Universities teach communication, critical reasoning and research methods, so why not include basic financial literacy – a competency that shapes every student’s future?

Why should universities be responsible for students’ financial literacy?

The transition from campus to career brings graduates not just income but a host of financial responsibilities: taxes, loans, rent, insurance, investments. Without formal education, students are often left to navigate this complexity through trial and error. The consequences can be costly: rising student debt, impulse spending, over-reliance on credit and high financial anxiety. As places of both professional and personal formation, universities are well placed to prepare students not only with the skills to earn but to manage what they earn.

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Critics argue that financial literacy should be taught at home. But most Indian households are not equipped to offer structured, current and comprehensive guidance. Financial habits may be observed within families but they are rarely analysed or improved.

Financial literacy is also not discipline-specific. Whether you study medicine, literature, design or commerce, you will still need to manage your income, plan for goals and safeguard your financial future. Universities can deliver this as a common first-year requirement – much like compulsory courses on the Indian constitution or environmental studies – ensuring that every student, regardless of major, leaves with the same essential toolkit for money management.

What can universities do to improve students’ money management?

Embedding financial literacy into university life doesn’t require overhauling the curriculum. The most effective approach is to treat it as a universal foundation subject in the first year, alongside core courses that every student must take. This ensures it reaches engineering, humanities, science and commerce students alike, signalling that money management is a life skill, not a niche subject. 

Universities can:

• integrate personal finance modules into general education courses
• invite guest speakers from banking, fintech and investment fields
• use simulations and games to teach budgeting, tax planning and investing
• establish finance clubs or student-led investment groups
• include financial well-being sessions in career counselling and orientation programmes.

Today’s students often don’t need convincing that they need these skills; many already aspire to financial independence early in life, influenced by the idea of earning fast, retiring early and living debt-free. What they need is structured hand-holding to turn an aspiration into a plan, and to build the confidence to make independent financial decisions. Whether assessed or not, the emphasis should be on making the content relevant, engaging and applicable from the very first pay cheque.

A practical model from Christ University

At Christ (Deemed to be University), the financial literacy programme began in the department of commerce, where faculty members were discussing financial freedom and students – including non-commerce majors – were eager to learn how to manage money to achieve life goals: a healthy bank balance, a home and a car, freedom from loans, and the ability to retire earlier than previous generations.

We started with awareness sessions on campus and then extended them to schools and colleges for students from diverse backgrounds. Over time, the initiative evolved from basic workshops into an experience-based programme, combining lectures with simulations, peer discussions and financial-planning exercises. As financial conditions and products have changed, we have refreshed examples – for instance, demystifying UPI credit, BNPL (buy now, pay later) and updated mutual fund norms – so the content stays current.

Students learn how inflation erodes savings, how systematic investment plans (SIPs), mutual funds and equities work, the importance of diversification, ways to evaluate risk; and how to build a 25‑year financial road map. In one assignment, they map finances until age 40, often setting goals beyond retirement – funding passion projects, entrepreneurial ventures or home ownership. This shift from “retirement planning” to “life design” reflects the Gen Z mindset. And, no, Shivi had not taken this course.

Why financial literacy matters

Only 27 per cent of Indian adults are financially literate, according to the 2019 survey from the National Centre for Financial Education. Meanwhile, young people are rapidly adopting digital payments, credit products and trading apps – often without guidance.

Global patterns are similar. Findings from the 2020 OECD survey on adult financial literacy and the FINRA study, which measures financial knowledge across the US, show persistent gaps in financial capability. In workplaces, the PwC Employee Financial Wellness Survey links financial stress to productivity and retention. The Reserve Bank of India release for 2023’s Financial Literacy Week underscored the message: “Good financial behaviour – your saviour.” The broader perspective of the S&P Global Finlit survey, from the Global Financial Literacy Excellence Center, highlights why early education is essential for long-term stability.

For universities, embedding financial literacy strengthens graduate readiness, employability and alumni loyalty. For Indian society, the impact is wider: financially capable graduates are less likely to fall into debt traps, more likely to save and invest wisely, and better positioned to contribute to sustainable growth.

The first pay cheque should not be a crisis of unmet expectations. It should mark the beginning of informed, empowered adulthood. Financial literacy enables students not just to survive, but to thrive in a world where money decisions shape life trajectories. Universities have the reach, responsibility and resources to make this happen. It’s time to prepare students for not only what they will do – but how they will live.

Manjari Sharma is associate professor in the department of commerce and coordinator of immersion and exchange programmes in the Office of International Affairs at Christ (Deemed to be University), India.