Mumbai: In today’s ever-evolving world, the adept management of personal finances forms the fulcrum to achieving success and nurturing a robust sense of financial well-being. At the heart of this journey lies financial literacy – a pivotal key that unlocks the ability to make informed decisions about saving, investing wisely, and sidestepping unnecessary debt. Beyond the confines of textbook knowledge, financial literacy encompasses the practical skills and confidence required to apply this wisdom effectively in real-world situations. As the financial landscape continues to evolve, cultivating these skills emerges as a necessity and an inherently empowering endeavour.
“Given that financial literacy includes both knowledge and financial behaviour, it becomes essential to teach its basic lessons as part of the school syllabi so that students can inculcate responsible spending patterns in their formative years. In the rapidly evolving financial markets, it will also help them develop an acumen to decode complex financial products, from student loans to mortgages, digital transactions, mutual funds, annuities and more,” says Alok Bansal, CEO of Global Business Process Management, Visionet Systems.
His advice is particularly timely because, according to a 2022 study by UK-headquartered IBS Intelligence (IBSi), India’s financial literacy metrics are not encouraging. The report indicates that the financial literacy rate of adults in India is only 27 per cent, much lower than countries like the United Kingdom which stands at 67 per cent, Singapore at 59 percent and the US at 57 percent.
“We are celebrating our 76h Independence Day, and this situation needs to be changed,” says Alok and adds, “Today, the youth have so many career opportunities and learning about e-commerce and drop shipping along with robust financial knowledge can help them launch online stores with minimal investment and offer a wide range of products to the global market. Even otherwise, managing money, I would say, is one of the most essential life skills, and every young person should know how to open a bank account at least, know the importance of a prudent budget and learn what a credit score is. Basic financial literacy is the foundation that can help build financial success in life and in business.”
He points out that responsible borrowing and debt management, cultivating a habit of regular savings, thoughtful planning of investments for the future, and staying informed about various economic trends can help the young truly experience financial freedom.
“As technology continues to advance, it will unlock numerous opportunities and introduce new financial products and apps, and it will be more important to be digitally literate as well and avoid being trapped in online scams and frauds. Digital literacy is becoming an increasingly important element of financial literacy,” he adds.
Considering that around 66 per cent of the total Indian population is below the age of 35 and nearly 40 per cent of the Indian population is aged between 13 to 35 years, the need for financial literacy among the young cannot be overstated.
Alok concludes, “Author Robert T. Kiyosaki correctly stated that the single most powerful asset that we all have is our mind. If it is trained well, it creates enormous wealth. And I would add that a trained, well-informed mind can also help the young to navigate a financial crisis with confidence and guide them towards the path of truly empowering and life-changing financial freedom.”