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Financial Literacy

If we go by the dictionary meaning, then financial literacy is “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.” Now, let us talk in simple words. Personal financial literacy is more than just being able to balance a checkbook, compare prices or get a job. It also includes skills like long-term vision and planning for the future, and the discipline to use those skills every day. We all make great efforts to teach children to read and write, but we don’t give their financial literacy the same attention. As a result, few young people know how to manage their personal financial lives. This problem is very widespread. You will see most of the teens who do are unable to answer basic financial questions or handle simple tasks, like understanding an invoice. However, there have been some improvements made in the past few years where the school curriculums have added personal finance classes. Now, just as students learn math and English, they learn financial literacy because it is also a basic skill that young people need. Although research on the effectiveness of financial literacy courses is mixed, it doesn’t matter since we all know how important it is in practical life.

One another aspect of financial literacy in India is that it is beyond personal finance. The public is faced with nearly two decades of struggling global economies, unemployment and the collapse of numerous financial institutions. Very few families have not experienced the fear of uncertain personal finances and felt concern about being financially stable and secure in their future. Yet, within the same time frame, changes in legislation for investment, saving, retirement and capital lending have provided the opportunity for individuals to acquire wealth through entrepreneurship and investing. Therefore, the definition of financial literacy encompasses more than just personal finance. To be financially literate, an individual does need to be fluent in personal finance, but also in global economics, entrepreneurship and investing, all on a platform of real-time technology.

I am sure that above-mentioned details on financial literacy must have opened your eyes to a new world of finance. So, let us make a move towards it and try and increase our knowledge on all relevant aspects of finance. This will certainly be helpful in making our future financially safe and better. Let us pledge to become and make everyone else a financial literate!