As India has the highest young population among the other nations in the world, it ranks low when we talk about financial literacy in the world.
How financial matters impact your attitude and behavior?
As financial literacy gained importance with the emerging variety of financial products, drastic changes in other economic factors, amplified complications of the markets, information overload etc. As our country aims to achieve making India a cashless and digital economy which cannot be fulfilled without making people financially educated. Low level of financial literacy thwarts individuals from creating veracious choices of financial decisions as it affects the awareness regarding financial products as well as investment preferences towards financial products and it becomes so necessary to take an effective action to improve overall well-being and avoid distress in financial matters to improve your financial status, for you to adopt the path of financial literacy is a way by which individuals can enhance their understanding of the financial concepts, markets and products.
A
study was conducted by the National Bureau of Economic Research, the research
team decided to test students in two different scenarios, the first group
underwent financial education training while the other group did not, after 12
weeks over half the students in first the group that received training were able to construct a budget, a statistically
significant amount over the only 1 student who was able to do so before the
training. As this research conducted suggests that with the right education,
kids can pick up the necessary skills required to become financially literate
As
many of you are facing challenges with your financial issues, that makes you
anxious, and more fearful when you have so many responsibilities to be
fulfilled like your child education, children’s marriage when financial
problems arise, it affects your personal lives and you are forced to think what
should you do, and then you people evoke an interest to understand the
financial concepts and how you have to relate it in your financial patterns,
that how to earn, from where you can earn, in that time you find yourself unhelpful because you
are not that capable to take any financial decision, you don’t; understand how
the things are going, how you can resolve your family’s financial problems. So
this all puts you in a critical situation where you find hard to take an appropriate decision to solve your problems, now this is the stage where you trigger a need
to understand the financial concepts, but when you suddenly go in any new stream,
it complicates you to understand at that moment. That’s why it is necessary to
educate yourself financially from the early age of your life.
When
you start to conceive the knowledge of managing your personal finance at the
early age, you gain confidence because you become capable in an understanding
of the calculations, interest return, framing a budget, maintaining your cash
flow diary this all make you a smart- spender, a good decision-maker, and it
makes you understand the financial principles to manage savings and
investments. And when you feel competent to take any decision regarding
financial matters you work more smartly with your earnings to secure your own
future and makes yourself responsible for the safety of your future.
The
financially less literate are found to be associated with a high-interest rate
borrowings, less participation in financial markets and poor retirement
planning.
There
are several studies have attempted to examine the level of financial literacy
in India, most of them reported the level of financial literacy in India is poor.In
the VISA(2012) study India ranks 23rd position among the 28
countries surveyed, and the study found that the children and the young have a significantly lower level of literacy compared to adults.
Evidence
from around the world presents alarming and widespread deficiencies in
financial literacy; this evidence has led to the launch of financial literacy
programs in many countries these are targeted to raise the understanding about
the principles and conventions of savings and money to enable individuals
to make optimal financial decisions consistent with their goals.
You
and your parents always concern for your quality education so that you can be
responsible for yourself and can earn a good amount of money. But no one really
concern about managing those earnings, people don’t consider about managing the fund
but only concern about earnings that’s why they struggle in their entire life
despite earned very well. And this is my personal experience which I am sharing with you. This is your responsibility to learn about money management, so that you can avoid personal financial crisis.
Financial Inclusion
Financial
inclusion is a process by which individuals and businesses can access
appropriate, affordable, and timely financial products and services, these
include banking, loan, equity, and insurance products.
Financial
Inclusion comes with potential dangers. The recent experiences in the microfinance
arena have shown that poor people take loans that they have no capacity to
service. Farmers have also taken loans that they have not been able to repay.
Many have been driven to suicide because of debt problems. Unless financial literacy must go hand in hand
with financial inclusion, instead of helping the poor, they will be put into
more trouble. Another example is the
mortgage crisis, in the U.S., which has led to a global crisis.
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