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How to effectively manage your finances?
How much do you love money enough to die with money in your bank? Weird question? I know, I ask this because many people died with a considerable amount of savings in the bank, money that they worked hard to earn, money they cut many corners to save, money they never really got to spend. Do you know how much 18,800 30 crore Rupees is lying unclaimed in Indian Banks? How well do you handle your finance?
This is as of 2019; to who does this money belong? People who have not claimed it in more than ten years? Many of them may be dead; many others have no inheritors. Why did they save up so much money?
If there was no way to spend it or pass it to another generation, a survey found that this person saves or builds assets if they can go even in retirement. Why do they do? for unforeseen costs said, forty percent of the respondents?
why people save money?
Legacy said many, Sunset having money in the bank, made the feel better. A handful of them said they were scared. They would run out of money if they started Spending. Twenty percent said they do not want to spend money, even after retirement, because money cannot be recovered once paid.
Here’s an unpopular question. Why earn money if you cannot finish it? What if someone told you that you could save enough money without being needlessly Frugal? This is India, where at least 75% of the population is Richard, but only 24 percent of the adult population is financially literate.
financial literacy in India
Meaning only 25% of Indian adults Understand the fundamentals of saving, investment, debt and, budgeting. Fifty percent of Indians save 0 to 20% of their earnings/salary. Then there are Indians who contribute to the 18,000 cr / + rupees line unclaimed and banks by holding too much and dying with money in the bank.
Either spending or over saving, we don’t know how to handle our money better. The answer lies in our School classrooms in class 8; we are taught how to calculate cost price and selling price. We are taught how to find answers to questions like this one. We’re taught how to calculate simple interest by multiplying p with R and T and dividing the sum by a hundred, and these sums up our financial literacy.
Renewal theories, but not the application. We taught calculation, but not how to make decisions in Money Matters. We take money-related polls every day. How many times a day do we calculate the area of a triangle or the value of x? Today in Maharashtra, only 17% of the population is financially literate. 32% in Delhi, 21%, In West Bengal, Chattisgarh, Arunachal Pradesh, Assam, Bihar, Haryana, Gujarat, 13% in Punjab.
Overall, the financial literacy rate of India is 24%. China’s monetary literacy rate is just as alarming 28%, Russia 38%, Brazil 35%, South Africa 42% bricks is a mess when it comes to financial literacy. Developed countries aren’t much better off. 38 percent of US households have credit card debt. Thirty-three percent of American adults have saved zero dollars for retirement.
The lack of financial literacy is a global problem. Most of us end up turning to our friends and family for matters of personal finance. Many of us do not even know anyone who knows finance. What should we do? Fix the basics, and the answer again lies in a Classroom.
financial literacy in School Curriculum
. It’s there that we should start talking about finances. We must include financial literacy in School Curriculum. It will help people understand economics, understand, loans, interest, investment, budgeting. Today, many students take High-interest loans from college. Spend much of their salary Repaying debt.
They fail to save, accept credit cards to bear Expenses, and get trapped in a cycle of borrowing and paying off. Today the concept of a budget is alien to many millennials, even older people. It’s hard for most people to follow simple steps. Like, it is determining income calculating expenses, setting realistic saving goals, and tracking them.
A survey found that 72% of Indians are unaware of how much to put aside or invest to achieve Financial Freedom. 76% said that there is a need for some more education in the financial planning space. Fifty-one percent of Millennials said that the level of personal finance knowledge is holding them back from making economic progress.
Financial literacy helps you make that progress. It enables you to maintain a healthy credit score in many countries. It is hard even to get a rental apartment. Suppose you do not have a good credit score; recruiters take credit spills into account. In that case, financial literacy can also improve the person’s standard of living estimates say that you need at least 1 million dollars to retire.
This is if you want to live 30 years without working, financial literacy can help you. Make intelligent investments without having to be frugal. You see, the key to a good life is not saving aimlessly. It’s a wise investment. If you’re worried about future medical expenses, take life term insurance that includes medical covers.
How to invest?
And frankly, I’m not an expert on finances, but I can share what some experts have told. They say Start investing early, diversify your portfolio, divide your goals into short-term and long-term vacation or a new fridge. It could be a short-term goal; retirement and a house in the Hills are long-term goals. Your child’s college and bequest again a long-term goal.
This is just the tip of financial literacy. It’s a subject that we must all deep dive into, and now is the time to start. We’ve all heard stories about covid victims of passed away, leaving behind a file of deaths of their families. Many have mortgaged their family homes, and many run cars and businesses. Financial planning can help avoid such crises, and more and more countries realize this in the United States; 21 states have compulsory financial literacy.
The latest is Australian financial education has been embedded in the school Curriculum. Russia has introduced financial education programs for students of Classes 2 to 11. Still, the two countries that take the most pride in their education systems, India and the United Kingdom, are yet to push the mandatory financial literacy programs.
So, what should you do? If you’re reading us from a country that does not offer financial literacy in school? Go online. There are many causes and fundamental finance, many of these courses are free. No matter what your age is. It’s never too late to learn, educate yourself, educate others, see how to maximize your savings secure your tomorrow without compromising on your dreams today