To complete our education, we go to schools, colleges, universities and begin to earn our livelihood, So that we can raise money to make our living. We take up jobs, pursue careers or start our own businesses. But which of these institutions makes us able to handle hard-earned resources of our own? Probably a very small number of them.
Financial literacy can be defined as our ability to effectively manage our finances by drawing up systematic budgets, paying off our loans, making purchasing and selling decisions and eventually being financially self-sustainable. Financial literacy is understanding the core concepts of financial management and incorporating them in our everyday lives.
Everything becomes part of financial literacy, from basic habits like keeping track of our spending and recognizing the need to invest more if we like a product to striking a balance between the importance of time gained and money lost, paying our taxes and filing tax returns, finalizing the property transactions, etc. We are not expected, as human beings, to know the nitty-gritty of financial management. But it is important to handle our own money in a way that does not affect us and our families in a negative way. Surely we don't want to end up with a day with no money at hand and starvation in our stomach.
In order to discern what he buys, what he spends, and what he owes, financial literacy will allow a person to develop a budgetary guide. This topic also affects entrepreneurs, who significantly contribute to our economy's financial growth and strength. Financial literacy helps individuals become autonomous and self-sufficient. It empowers you with basic knowledge of options for saving, financial markets, budgeting of money, etc.
Understanding your money mitigates the danger of facing a fraud-like situation. A few strategies are anything but difficult to accept, particularly when they’re originating from somebody who is by all accounts learned and planned. Basic knowledge of financial literacy will help people with foreseeing the risks and argue/justify with anyone learned and well-informed.
Debt avoidance and management is something that every single person should know how to do. Individuals are also unable to determine their ability to service debt, or how much debt they owe to fund their lives and the things they want to do. In this context, financial literacy for students makes even more sense because of the current number of students' lives and will continue to have an impact on them. Hope You Liked The Article. Feel free To express your Views in the comments. Hope you have a good day ahead