How to Achieve Financial Literacy

 

Being financially literate means, you have an understanding in few core areas:

•      Budgeting and setting financial goals

•      Handling emergencies like job loss, accident, hospitalization, death, etc.

•      Paying bills and saving money

•      Basics of loans (personal, debt, mortgages, etc.)

•      Credit cards and credit scores

•      How investing works, pension plans, mutual funds, the stock market, etc.

Financial literacy is not something you will magically know either.

Majority of schools are not teaching personal finances to students. Parents and family may be misinformed or lack a deeper knowledge that children cannot learn from.

What should one do?

Unless you take some economics courses within your education path, becoming financially literate is on YOU.

Yes, you can blame the education system, your parents, your environment, etc.

While they can all have some affect, this is still something you ultimately control. You alone have the ability to change your lack of finance knowledge.

Read the above over again because I think it is important.

Harsh truth? Maybe. But no one is truly going to hold your hand and show you the way.

Even if someone in your life does arm you with some money and investing insights, it’s on you as to what you do with that information.

The good thing is, many school districts are starting to add classes to the curriculum. But it has a long way to go until it is universally adopted.

How to Achieve Financial literacy On Your Own?

Again, since you might not have had any classes or had much insight, it’s up to you to become financially literate.

Luckily, with the digital age and abundant amount of information, you can learn finances relatively fast.

Everyone is at a different learning curve and pending your life’s schedule, it may take you some time. So, I recommend you go at your own learning pace.

That being said, here are some simple ways to help you become financially literate.

1. Hit the Books

In order to get started, books will become key in your quest to be financially literate. It was crucial for my learning, especially coming from no background in finance or investing.

Dedicate a minimum of 1-2 hours each week to reading books about money management, investing, finances, etc.

2. Read Magazines and online Publishers

I find books to be the most important, but magazines and online publications can be equally important to your financial education. Publications like Economic Times, Financial Times, Fortune, and there are tons of personal finance bloggers (like me). Also, websites like valueresearchonline.com, moneycontrol.com, fvindia.com, finviseindia.com, Investopedia, MarketWatch, etc. have tons of useful information, online calculators, and more.

3. Use Financial Management tools

Managing your finances and money doesn’t have to be hard or boring. Thanks to tech and the internet, there is an abundance of tools to help you be more proficient.

But besides helping you organize and visualize your financial life; you end up learning a lot too. Many of these tools have great learning centres or blogs.

4. Listen to Money Podcasts

Being able to dedicate time to reading can be challenging. You may have a busy work and family life, which is exactly why podcasts are perfect.

Podcasting is huge! And there are many great ones you can listen to on your way to or from work, doing chores, or even at work (if it doesn’t disrupt your productivity). Too many good ones to list, but many might be 10 minutes long, to almost an hour of strong info. free education you can listen to! Here is a great list of some of the best finance podcasts.

5. Take a Financial literacy course

So, besides books and online publications, you can totally get involved in a financial literacy class or course. Whether that is at an online school, college course, adult education center, etc. This is if you feel you want to go a step further or need the structure to learn. Many are paid, but there are some free courses online that can be a great educator.

6. Get Your Math on

To be financially literate, you’ll need to bust out some most basic math skills. Brush up on some math or look into some basic formulas that can help you organize your money, savings percentages, etc. I know spreadsheets can make this easier or software will do the math for you. It’s fine if you do, but know how the math works, why it’s that number, and if you needed to that you could calculate that yourself.

7. Break Your Consumer Mentality

A big challenge for many Indians, is we have a consumer mentality. But’ it’s really unavoidable at first. We are targeted with ads everywhere, media promotes lavish lifestyles, social media makes of envious of others possessions, etc. Over your financial literacy journey, you’ll learn to break the consumer mentality and developer an investor mentality.

Location: Delhi, India

Comments

Post a Comment

Popular posts from this blog

"Top 5 takeaways from BUDGET 2019" by FinVise India

Image
Finance Minister Nirmala Sitharaman presented her first Union Budget and also the first of the Narendra Modi 2.0 government. Here are 5 key takeaways from Budget 2019: 1) Towards a $5 trillion economy Finance Minister Nirmala Sitharaman opened her speech with a target of making India a 5-trillion-dollar economy. She said that the goal was “imminently achievable" in the next few years. She said India took 50 years to become a $1 trillion economy. The Indian economy was at $1.85 trillion five years back, she added. "We have now reached the $2.7-trillion-mark and would become a $3 trillion economy in the current year," she said. 2) PAN card, Aadhaar interchangeable for filing income tax returns (ITR) Finance Minister Nirmala Sitharaman announced the decision to make PAN and Aadhaar cards interchangeable soon. PAN and Aadhaar have been made interchangeable, allowing those who do not have PAN to file income tax returns (ITR). This means that taxpayers will need either a
Read more

Why Invest in India?........India – Land of Unlimited Opportunities

Image
Why Invest in India??........ India – Land of unlimited opportunities # Reason 01 One of the world's fastest-growing economies India too remains one of the fastest-growing economies in the world. Source: International Monetary Fund FDI inflows increased by 37% since the launch of Make in India initiative. Source:  Department for Promotion of Industry and Internal Trade, Government of India Leading investors ranked India as the most attractive market. Source:  Ernst & Young Emerging Markets Center # Reason 02 The largest youth population in the world India to have the world’s largest youth population by 2020. Source:  United Nations Population Fund India to be the largest supplier of university graduates in the world by 2020. Source:  British Council India has the third-largest group of scientists and technicians in the world. Source:  All India Management Association & The Boston Consulting Group # Reason 03 Huge domestic market Risin
Read more

Having an emergency fund can ease financial, emotional pressure.....by FinVise India

Image
**Source: MINT Vidya, an old client, called me at 9 pm once. I found it a bit strange because I do not receive calls from clients so late, but I took the call. She told me her husband, Venkat, who is a heart patient, had to undergo bypass surgery immediately. He was denied health insurance by many companies because of his ailment. In the couple's last review two weeks before, they were asked to keep six to eight months' expenses in a Flexi bank fixed deposit (FD) for any emergency. Unfortunately, that didn't happen. Vidya had stopped working, and to meet daily expenses, they had to stop their systematic investment plans (SIPs) too. Their next option was to redeem the investments they had accumulated to fund their son's higher education. However, the money would take five working days to reach her bank account and the payment to the hospital had to be made immediately. So, she had to borrow money from her brother for five days. In another case, Bharati, a single
Read more