The world and the market is a volatile ecosystem. ‘Survival of the fittest’ is the need of the hour. Gone are those days when your exam scores mattered the most. Now there are plenty of other things you must be aware of to make a good living. Financial literacy may not be a compulsory subject as evident from our childhood course structure, but as an adult it’s a must know topic.
What is Financial Literacy?
Financial literacy is a skill set that enables us to understand and effectively manage our financial resources. A financially literate individual knows how to make the best decisions when it comes to managing finances, budgeting and even investing.
Financial knowledge brings clarity to a person in all matters related to money. It is undoubtedly one of the most required skill that helps you manage your assets in the best way possible. It also enables you to take monetary decisions in a way that maximizes your profits and returns.
Isn’t Financial Literacy only for Commerce Stream?
This is the first question that pops up in the minds of students who do not have an accounts background. It’s natural for a science or an art student to have this doubt. Also, many professionals such as primary school teachers, content writers, construction workers, event managers, actors etc. may have the same concern.
The answer is rather simple. Despite the fact that most professional fields are not related to finance in any way, they still earn don’t they? We all survive on money in one way or the other. The effective management of your existing assets such as property, car, electronic devices, etc. and the proper saving strategy for the incoming salary requires financial literacy.
I don’t even understand the Basic Terminology, How will I understand Financial Management?
When we talk about financial literacy we aren’t talking about accountancy, balance sheets, ledgers, and so on. Financial literacy simply deals with a better understanding of you money matters. It’s more of a vision than a rigorous course. Some of the financial literates around you may not even be graduates.
For example a housewife who is given a fixed amount of money every month manages much more than just feeding the in-mates and doing household chores. Rationing for another little member of the house including unexpected guests also requires the understanding of budgeting as per expenses. Further tasks include water bills, electricity bills, and salaries of servants.
I can Earn Good Enough, Do you think I need Financial Literacy?
Isn’t it an amazing feeling that you earn a good amount to keep both you and your family happy. But are you prepared for the future? As time passes responsibilities increase and there arises an imbalance between the incoming money and the expenditure. Wouldn’t it be better if you knew how savings can do wonders for you?
Now, there are some who believe that there will be no upcoming responsibilities, the independent lot who love to life on their terms. Fair enough! But freedom too comes at an expense. Wouldn’t you want to travel the world, try different adventure sports, buy yourself a luxurious apartment and maybe more? Well, your perspective of the future can be brighter and clearer if you know how to manage your finances from this very moment.
Financial literacy is now more of a necessity than a mere additional skill set. It gives you better insights for the future and helps you to make optimal decisions. Who knows, maybe your investment can double your earnings in the coming few years.