IMPORTANCE AND WHY THERE IS A NEED OF FINANCIAL LITERACY IN OUR LIVES:

Many of you must have heard about the term "financial literacy". Well financial literacy basically means having a basic understanding of finances and that you have a grasp on the value of money. Being financially literate allows you and others to make smarter money choices and decisions in life.

WHAT DOES IT MEANS TO BE FINANCIALLY LITERATE?

 1. Budgeting to manage your money

 2. Setting financial goals

 3. Knowledge about loans, debts, mortgages, etc

 4. How stock market works and basics of                   investing.

 

 Now, financial knowledge is not something anyone will teach you. The problem is majority of schools are not teaching personal finances to students and there is a lack of financial education. Harsh truth? But no one is truly going to teach you by holding your hand. Even if someone gives insight it's on you what you do with that information. According to NEP (New Education Policy), this subject is included but it has a long way to go.

WHY IS IT IMPORTANT TO BE FINANCIALLY LITERATE?

       According to a survey, India is about 17% of world population and the literacy rate is around 74%. But out of total population only 24% population is financially literate. From this, we can know the need to educate the masses about finance and savings.

        It helps you to ensure that you do not struggle financially and leave yourself vulnerable to bad money habits.

HOW TO ACHIEVE FINANCIAL LITERACY ON YOUR OWN?

  

That being said, here are some ways to help you become financially literate. This is for beginners for those who don't have basic knowledge. 

  

1. READ BOOKS

   In order to get started, personal finance books will help you a lot . Personally I have read 2-3 books which were fantastic. It helped me lot because when I started I had no knowledge about all these. Here are my recommendations for people who are starting now.

a. THE DHANDHO INVESTOR by Mohnish Pabrai.  

It deals with the technique of investing in such a way to maximize rewards while minimizing risks. If you are into stock market or real estate you should definitely read this book.

b. 12 Lessons I learnt from Vedic and Puranic stories by Devdutt Pattnaik.

It deals from the perspective of Ramayana and Mahabharata. This book tells stories about how Lakshmi, the goddess of wealth keeps coming our way and the situations that occurs in our lives. This book will incline you to learn values more than technicality.

2. USE FINANCIAL TOOLS:

 It is very important to practically use than just to keep in reading. There are a number of softwares and tools that you can use to manage your daily finances. If you are looking for budgeting then Mint is the best app to track your money or if you want any insights. You can search on Google you will find more options.

3. BASIC MATHEMATICAL KNOWLEDGE:

 Well I do not know a lot about maths as a subject. But it is necessary to have basic math skills required to do certain calculations. You need to know about how to calculate percentages, tax rates, to help you in preparing your budget. I know softwares can make your work a lot easy, but it is important to know how did the calculations derived from.

4. BREAKING CONSUMER MENTALITY:

  In today's world we are targeted with various ads that promotes lavish lifestyles, fancy cars that makes us envious about what others have. By learning financial literacy you will be able to know how things work and can break through the consumer mentality.

 

  In today's world earning money is difficult but spending can be done easily. So whether you are a student or an adult, learning about money is  crucial and will continue to remain. It is important to have a good financial plan for future for your own betterment. Remember you are a product and you are being sold eveyday, it depends on you how you see things and make the best decisions.