This week the Reserve Bank of India is celebrating Financial Literacy Week, the theme for this year is on Good Financial Behavior. It’s good to see RBI talking about financial literacy and good financial behavior.
There has to be more emphasis on spreading financial literacy because just 30–40% of Indians are financially literate, according to surveys.
Being financially literate can not only help you manage your personal finances but can also have a positive impact on your overall well-being.
Studies have shown that financially literate people:
Save and invest more
Are better at managing debt by paying credit cards in full and avoiding payday lenders, moneylenders, etc.
Are less financially stressed and better prepared to deal with unforeseen shocks
Being financially literate is not just about managing your money; in many ways, it’s a life skill.
Principles like compounding, being prepared for emergencies, and managing risks are applicable across your life in your career, health, etc.
For example, a small but consistent effort to be healthy or learn something new can compound throughout your life.
It’s a tragedy that personal finance has become all about stocks and mutual funds. There’s more to it than just what stock to buy.
It’s about considering the personal and financial aspects to be prepared for the future to continue doing what you enjoy.
Knowing how to manage your personal finances isn’t rocket science. Taking care of the key elements, like saving, being prepared for emergencies, having a life and health insurance policy, and investing for retirement, is most of it.
You can figure it out with a little effort in learning.
There’s no better place to learn the basics of how to manage your personal finances than Varsity