A friend of mine has started earning just now and after getting his first month’s salary he spent it over useless things in just a week. It is one of those thousands of examples showing the lack of financial education.Our youth has been more into spending money which they have earned instead of saving their hard earned money.
A survey conducted by S&P shows that more than 75% of the Indian adults don’t have the knowledge of financial concept. More over 80% of women are not aware enough about the concept of financial education.What really financial education is and why it is important?Financial Education is the art of knowing how the money actually works, how a person should spend and where to spend and how to save money. The financial education doesn’t just limit to adults, every person should have the proper knowledge and understanding of the basic financial education.In our community where life insurance agents and brokers recommend financial advice on products which are not suitable to us due to lack of proper financial education people, are cheated and sometimes lose their hard-earned money.As an educated person you should have knowledge of certain thing which are mentioned below to make better financial decisions.
It is important for you to know how to save the money from the income which you are earning each month. For Example, Raj earned 1000$ per month our which he pays rent of 500$ per month and spends 250$ on food, From the remaining 250$ left, he buys clothes for himself at the end of month he is left with no saving.So, it is important for the raj to understand where to spend money and manage his finance better.
A person should understand how insurance is important for his life. Suppose any unexpected event occurs or you have an unforeseen accident, insurance will help you recover the money.It is important for a person to have knowledge of taxes applicable on his income and on his spending, so that he can plan to save taxes or invest that money in Provident funds or other securities.A person must be aware of Stock markets and mutual funds because they are a good source of investing money. There needs to be a proper understanding of share and stock before purchasing them to avoid losses.
Banks are the backbone of the country’s economy. One must be aware of the various facilities provided by the banks like gold loan, scholarships, Lockers, and Interest rates on various kinds of loans.