Investing in the future: First-hand lessons in financial literacy

How education and practice come together in the initiative of “Together in Class” and UniCredit Bulbank.

In April, over 100 students from Sofia, Stamboliyski, and Pleven took part in workshops on financial literacy and personal finance management organized by Teach For Bulgaria and UniCredit Bulbank.

Real-Life Lessons: How to Save When You’re Still in School

“When I prepare the presentation, I put myself in the students’ shoes because, even though I was a student a long time ago, the memories are still fresh, and I try to structure the conversation with them in such a way that it is interesting and useful,” said Iliya, adding that this is why he always uses examples that are close to the children’s everyday lives.

Almost half of the class raises their hands when asked if they work—some in restaurants, others in supermarkets in the city, and others help in the family business. However, when asked if they manage to save regularly, significantly fewer hands are raised. The reasons for this are many and varied, and during the lesson, strategies were discussed to help students save regularly, from drawing up a monthly budget to keep track of their income and expenses to prioritizing saving at the beginning of the month instead of saving whatever is left at the end.

Investment instruments were also a topic of discussion. The reason for this was that Ms. Terzieva, the class teacher, who shared that her and her husband contribute to the family budget by growing two acres of tomatoes, which they then sell. Referring to this earlier example, Iliya illustrated to the students what shares are, how this investment instrument works, and what the risks and benefits of different types of investments are.

Finance and the Furute: When Students are Already Investing

In Sofia, 50 students from the tenth, eleventh, and twelfth grades at 68. Akad. Nikola Obreshkov Secondary School visited UniCredit’s headquarters to participate in workshops on financial literacy and career guidance led by Stefan Prodev, Regional Investment Products Expert, and Snezhana Berova, Employee Experience and Engagement Programs Manager.

Right at the start of the session, some students shared that they themselves invest in silver and gold, cryptocurrencies, and mutual funds. Therefore, it was very useful for them to learn that when investing, it is important not to put all their eggs in one basket, to carefully assess the risk and potential return on their investment, and that time is a key factor in long-term investments.

“I learned a lot of new things about myself and how to manage my finances better. I have been working since I was 16 and always try to set aside money every month for future investments, as I think it is very important. I also learned what to strive for more, which investments are the right ones and which are not long-term,” said Ivona Balabanova from the 11th grade.

During the discussion about what they would invest their money in, there were also ideas for investing in real estate, such as an apartment in a large European city, followed by a discussion about the benefits of such an investment.

Ivan, Spaska and Georgi: A Cautionary Financial Tale

Bozhidar Nikolov, Director of the Cherven Bryag branch, and Georgi Angelov, Senior Sales Manager at UniCredit Leasing, met with students from the ninth, tenth, and eleventh grades at the Professional High School of Management and Food Technologies in Pleven.

The volunteers presented the topic of personal finance management in a creative way, telling the stories of fictional characters Bai Ivan, Spaska, and Georgi.

Bai Ivan started working as an apprentice in the construction business. He worked in Bulgaria and abroad and earned good money. After a few years, he started his own business in the same field, bought equipment, and grew his business. Bai Ivan was doing well until he started gambling. His situation quickly changed—he got into debt, lost his business, and looked for ways to finance his expensive hobby. And so he found himself at 43, with 30 years of work experience but no social security.

Spaska is Bai Ivan’s wife. She has completed her primary education and has no profession outside the home. When Bai Ivan turns to gambling, Spaska looks for seasonal work to help her take care of their son. Spaska is 34 years old, with a total of four years of work experience and, again, no social security.

Their son Georgi is 21 years old, and his parents’ fate motivates him to finish his secondary education. Since he was a student, he has been working in the village shop, which has allowed him to develop additional skills in stock management. Georgi dares to leave his job to continue his education at a university in the big city. He is now a sales representative and, unlike his parents, has started to build up social security contributions from an early age.

Although the characters of Bai Ivan, Spaska, and Georgi are fictional, they are based on the stories of real people who are living with the consequences of their financial decisions. The students actively participated in a discussion about the prospects for the three characters, the significant differences in their opportunities to find funding, and the differences in their opportunities to receive support from social structures.

“Our goal with this lecture and with what we teach them in Geography and Economics is to create an attitude among students that, first, you must have an education, and second, you must know that you have responsibilities to the state and that you must fulfill them,” said Ms. Elitsa Yaninska, a geography teacher at the high school, after the visit.

“Today, our students welcomed us very warmly and asked a lot of questions, which means that we have sparked their desire to learn about the practical process. I am very pleased that at the end of the meeting, they came to us and continued with their questions, which means that we have achieved our goals,” said Georgi Angelov, Regional Investment Products Expert, sharing his experience.

Why is it important to talk to students about financial literacy?

Data from the Ministry of Finance and research by international organizations such as the World Bank, the OECD, and the European Union show that Bulgaria is among the countries with the lowest levels of financial literacy in the European Union. Only 35% of Bulgarian adults are financially literate, understand basic financial concepts, and can make informed decisions, while many do not understand basic financial concepts such as inflation, interest rates, and investments. Bulgarian ninth graders also rank 16th out of 20 countries in financial literacy, according to the 2018 PISA survey.

EduAction and the pan-European partnership

The financial literacy workshops for students are a joint initiative of Teach For Bulgaria and UniCredit Bulbank and are part of the EduAction campaign, which took place from March 31 to April 11 in Austria, Bulgaria, Germany, Italy, Romania, Serbia, and Slovakia. The campaign is part of a three-year partnership between UniCredit Foundation and the global network Teach For All, which aims to improve the quality of education in Europe by helping teachers in the seven countries develop the leadership potential of their students.

In Bulgaria, the funds will be invested in the expansion of the Model Schools program—the only program in Bulgaria for training and supporting school teams that encourages a comprehensive transformation of the learning process (management and teaching) by putting the student at the center. By 2026, over 200 school teams from all over Bulgaria will be supported by Teach For Bulgaria.