“The single biggest difference between financial success and financial failure is how well you manage your money.”
Financial literacy refers to the understanding and effective use of various financial skills, including personal financial management, investing and budgeting. All stakeholders including consumers must work in combination for financial literacy through the amalgamation of innovative strategies. India is home to 1.35 billion people and also to extreme poverty. This has been observed that the richer keep on getting rich and the poor is getting poorer. Hereby to bridge this gap spreading awareness about financial literacy is as important as any other topic. Financial literacy and financial stability are two key features of an efficient economy.
Financial illiteracy positions a burden on the nation in the form of a higher cost of financial security and lesser prosperity. A large amount people choose to invest in physical assets and short-term instruments than in financial assets. Therefore, clearly, the struggles with long-term financial investments are much more. This has created a need that the youth should be introduced to this concept and carefully trained so as to strive for a better tomorrow with better infrastructure and an improved standard of living.
The things that we are taught from a younger age tend to be with us in future. Financial literacy could also be one such part of the education system. As money is something that everyone does hear about from a young age and the mantra of planning it out well can give a plethora of opportunities to the youth. The millennials are considered to be cautious and practical in terms of finances as compared to their ancestors but they are also delicate in dealing with personal finances. They are hyper-connected and demand tailor-made financial solutions. There is also the need to reach out to the economically weaker sections of society and the lower-income groups to create more awareness about the topic.
People believe that the one who is ‘rich’ or ‘literate’ is also ‘financially literate’ but this is a myth. The lack of basic financial understanding leads to fruitless and uncreative investment decisions. Spreading awareness is the only way to rule this out. Another very common myth prevalent is that financial knowledge is necessary for adults only, but this could never be the truth. As earlier, if you invest there is a high probability of better results. Hereby implementing financial literacy from a preliminary stage may dismiss certain factors and would lead to overall inclusive growth for all.