Need of Financial Literacy In India
With the growing Indian economy there has been a rapid increase in the investments in the retail industry. But, the country's citizens lack financial literacy. Individuals should be imparted with financial skills and knowledge, mainly at schools and college. They should be able to practise their own personal finance effectively to achieve their financial goals. One should learn to get well prepared to handle financial burdens and this will enable to develop wealth creation skills and that will help in the growth of the economy.
Lack of understanding of basics of Investments
When it comes to investing and saving wisely, people struggle to understand the proper system of handling finances and making any investment. New investors; while investing in an IPO or mutual fund, they jump in without logical understanding or risk and reward and end up losing money. Emphasis should be given on choosing the right investment option and managing the risk associated with the securities.
Not taking financial understanding seriously
When the need for financial literacy arises, sometimes it's too late. It's only when there arises a dire need for it, do people wake up. People live more for the present without thinking about future consequences.
Financial Planning
Financial literacy is needed for any kind of financial planning to take place. Financial planning is a long-term exercise. This is valid for wealth accumulation too. The initial effort is to acquire some kind of financial understanding and to learn how much you spend on yourself. Constructing a budget can support you in your goal to save and invest. Financial literacy and knowledge of how your wealth gets influenced by factors like inflation, you know how to manage your daily expenses, while having a long view to save for the future or any emergency. Financial knowledge can also help you in your investment decisions, and what methods of investment suit your requirements.
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