FINANCIAL LITERACY
In our daily lives, we visit many places. Schools, colleges, markets, etc. We make our livelihood by earning and spending money on these. But, some questions remained. How do we manage our money? How do we become self-sufficient?
What Is Financial Literacy?
Financial Literacy is our ability to manage our money. We can do so with the help of systematic budgets, paying off our debts, making buying and selling decisions and ultimately becoming financially self-sustainable.
What Does Financial Literacy Involve?
It comprises of simple practices like keeping track of our expenses and understanding the need to spend money. It also includes striking a balance between the value of time saved, money lost, paying our taxes, filing of tax returns, finalizing the property deals, and much more.
Why is Financial Literacy so Important?
It is essential because it can enable an individual to build up a budgetary guide to distinguish what he buys, what he spends, and what he owes. It also additionally influences entrepreneurs, who incredibly add to financial development and strength of our economy. It helps people in becoming independent and self-sufficient. It empowers you with basic knowledge of investment options, financial markets, capital budgeting, etc.
Understanding your money mitigates the danger of facing a fraud-like situation. A few strategies are needed to be accepted. Basic knowledge will help people with foreseeing the risks and argue/justify with anyone learned and well-informed.
What should Topics you should be aware of in Financial Literacy?
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Budgeting and techniques of it
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The direct and indirect taxation system
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Direct tax slabs
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Income and expense tracking
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Loans and debt – EMI management
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Interest rate systems: fixed versus floating
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Business and organisational transaction studies
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Elementary Book-keeping and Accountancy
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Cash in-flow and out-flow Statements
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Investment & personal finance management
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Asset management
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Business negotiation skills and techniques
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Make or buy decision-making
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Financial markets
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Capital structure – owner’s funds and borrowed stocks
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Basics of Risk Management
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Microeconomics and Macroeconomics fundamentals
While there are various means to learn from, I recommend that all of us should join a short-term, weekend programme which helps you get financially literate.