The word empowerment is mostly associated with genders and empowering the races and masses at times but lesser we acknowledge that empowerment, actually greater empowerment comes through the path of education. No, not only academic but financial too.
So, you must be wondering are we going to talk about finances or how to earn more money, as we all want to. Or it’s yet another article on financial management and careers. But no, it’s about Financial Literacy.
Financial Literacy is something that empowers not only an individual or a family but the state as a whole. Financial literacy refers to knowledge of SIS; Saving, Investing and Spending. And by now you must be thinking yes I know we need to save money, know how to invest and of course I spend every day. But no, financial literacy is knowing how much to save, when and where to invest and how to spend, effectively or you can say personal finances.
According to reports by NFEC Research Team, 40.2% of those with low levels of financial literacy relied on parents, friends, and acquaintances as their most important source of financial knowledge, compared to 20.8% of those with the highest levels of financial literacy. And,57% of millennials have either an advisor or robo advisor. And this makes it very clear that financial literacy is a yet to be attained goal in our education system. As, 54 percent of student loan holders didn’t attempt to figure out their future monthly payments before taking out their loans, according to GFLEC.
As rightly stated by Paul Goebel, Director, Student Money Management Center, University of North Texas; “For college students, financial literacy is important because the formula for college success today only has two factors: grades and money. The future success of our students relies on providing opportunities for them to learn, develop, and strengthen core life skills they need today and more importantly tomorrow as successful graduates.”
In the words of Cherry Dale, Director of Financial Education, Virginia Credit Union, “I think if people truly understand the way that financial systems work at an early age, or even later on in life—if they’ve made poor decisions but learn how they can go back and fix them and start planning for the future—they can then encompass that and take the steps to make a better life for themselves.”
And now the question persists where and how to get ‘financially literate’ as India is having approx. 17.5% of the world’s population but nearly 76% of India’s adult population doesn’t even understand the basic financial concepts. Whereas, countries like Australia, Canada, Japan, the United States and the United Kingdom too are raising interest in personal finance by focusing on state-run programs.
Financial Empowerment is not just earning but Financial Literacy is Empowerment which refers to the skill set and knowledge base through which an individual can make informed, efficient and effective decisions of finances resources.
To be continued.