When we are young, we dream of growing up and becoming adults. We vow that we will do things differently. We ache to grow up so that we can be free to do all the things we want, when we grow up. Yet, when we grow up, we are chained to our physical needs and necessities and we end up becoming slaves to our desks. Sounds relatable? Well, it does not need to be this way. Financial literacy can save the day!
Financial literacy is unfortunately a well ignored life skill that can save the day. Only if we give it a chance. Yet, in school, students are made to follow a set template that teaches the same skills to each and every individual irrespective of interest or skill or even aptitude. We fail to recognize the need to bring in life skills that will help them lead a normal adult life, so that they do not have to tear their hair out in frustration when they start adulting. We let them down. From renting an apartment, to learning to choose between a fixed and floating rate of interest for monthly EMIs, from understanding how much financial burden we can take on when we have a credit card to swipe to even planning grocery buying and making investments – there are things that we do not know and things that nobody teaches us. But apparently we all know Calculus! With financial literacy, we can learn these things and learn to take care of ourselves. If nothing else, this also teaches us what to expect from the real world when we are let out into it, when we make the journey from the cocoon into the clear blue sky. And you do not need to be an IIM graduate to learn any of this!
So here are a few things that financial literacy can teach you:
- Save: With financial literacy, you can learn exactly how much to save and how much to spend, and how much to invest. You can set your own ratio and then spend accordingly. This is especially important for those who have managed to get a credit card for the first time in their lives. A little bit of planning can go a long way and keep you from going overboard!
- Plan Loans: Before we are out in the real world, we are first saddled with a good amount of student debt or student loan. While this was traditionally a problem in the West, it is also becoming a problem closer back home since a college education from a reputed institute in India is becoming very expensive. A loan is procured even before the student’s 18th birthday and upon graduation, this is the gift he or she gets. Financial literacy can help you understand loans and what kind of a job you would need with your degree in order to be able to pay it off on time. This can also help you for future loans for your home, cars and more.
- Make your Money work for you: This is possibly one of the most important lessons that financial literacy can teach us. Our earnings need to work for us and that is why we need to have a fair understanding of the different kinds of financial tools for saving and investing. This will help us become wealthy instead of just paying the bills!
