Financial Literacy... Important Outlook
Prasannan P
Regional Head at HDFC Life | Strategic Planning, Network Expansion, Competitive Differentiation
What Is Financial Literacy Definition?
Being financially literate means having the ability to make healthy financial decisions regarding debt, credit, saving, budgeting, spending and investment.
If you know below mentioned pointers, then you are financial literate.
Financial Literacy in India
For more details on above illustration please visit:- https://streetfins.com/the-importance-of-financial-literacy-in-india/
While above mentioned illustration states financial literacy level of India in comparison to developed & emerging economies, it opens up important question who all should be financial literate; specially with population of India and opportunities that it brings along with it.
Who Needs Financial Literacy Skills?
The answer will be — everyone needs financial literacy skills! Whether you are an engineer, blogger, writer, doctor, entrepreneur.
What Are the Benefits of Financial Literacy?
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Less Debt: - One of the quickest ways start struggling with money is to take on debt. Therefore, by equipping yourself with sound financial skills, you are more likely to avoid the financial hardship that–so often–accompanies debt.
Higher Net Worth: - Every personal financial decision can be boiled down to a single outcome–it will either increase, or decrease your net worth. So, gaining a better understanding of how money works will help you to make better choices in your finances, and therefore increase your net worth.
Less Financial Struggle: - Most people know what it is like to struggle with money, but very few understand what it is like to succeed. Improving your knowledge of personal finance will increase your chances of experiencing success with money.
Better with Household Finances: - Paying your bills on time, and managing your household expenses responsibly is a side effect of good financial know-how. So, the more you improve your financial skillset, the better your household financial situation will become.
You will take informed financial decisions being financial literate.
Budgeting?– Being financially literate will enable you to understand how to budget your money so that you are able to track your spending and avoid wasting money on things that you don’t really need.
Prioritizing savings?– Savings is an essential aspect of maintaining a good financial situation.?Learning how to save will help you to make sound investments that would improve your financial situation in the future. Beginners need to increase their financial knowledge and start saving money to secure their financial future.
Interest rates– Financial knowledge allows you to understand how interest rates for loans, savings, and credit cards work. Having an in-depth understanding of interest rates will save you money in the long run.
Debt management– When you are financially literate, you will manage your debt in a manner that does not spiral out of control.?You’ll know how to compare loan terms and how to avoid high-interest rates and high credit utilization. If you already have debt, financial literacy will help you to choose the best methods to get out of debt.
Retirement planning?– Saving for retirement is a long-term financial goal that requires you to have financial knowledge. When you are financially literate, you can calculate how much to save and devise strategies that will help you get there.
From budgeting to building wealth, every piece of knowledge you gain is a tool that will help you make stronger and stronger financial decisions… So, improve your financial literacy!!!
Thought Leader | Sales Strategist | Business Turnaround Architect | Growth Stalwart
1 年Prasannan P Kudos for shedding light on the significance of financial literacy in a comprehensive and accessible manner. The article effectively conveys the benefits and practical tips, making it a valuable resource for individuals seeking to enhance their financial decision-making skills.
Strategist/Content Creator /Angel Investor
2 年Excellent !
Chief Sales Officer @ niyogin | PGDMM
2 年Good Read PP
A versatile Head of Customer Services with 20+ years experience in managing and leading teams in the telecoms and finance sector.
2 年Well written
ex-Singapore Airlines || Thought Leader || Speaker || Change Maker || Investor || Entrepreneur || Mental Health || Bullish on Bharat
2 年All 5 pointers are awesome Prasannan P. Really loved it and also need of the hour. One point I would like add here is Charity. We must allocate minimum 10% of our Gross towards charity. If some one cannot they can start with 1% and move towards 10%.. We came to know this 25 years back by a global VP of an MNC Bank and we started following this. Amazing transformation in every aspects of our lives. What he said at that time was: - 10% Charity - 20% Investment - 20% Savings - 50% Living expenses Plus start a Side Hustle using the unproductive time of 37 hrs a week to match the income and then scale it up 10X or 20X or ........................That is what I did 24 years back while working for the No:1 Airline from 9am-6pm,?was upgrading my skills from 6pm -10 pm through reading books, listening to various audios (now called podcasts) and attending seminars (no called webinars ) on my niche and laid a foundation for a passive income.?After I got retired last year I was able to get 3 times of my airline income as passive which can be transferred to next gen. Also most people don't know how our lives work. So I keep recommending the book " How life works " by Andrew Matthews in all my trainings. It is really an awesome book.