Why Financial Literacy??
A few years ago even after pursuing a post-graduate programme in Business Administration from one of India's premier colleges I too had that fear. That fear of thinking practical finance is too complex to understand.
Until I pondered, okay so I get a job, work for a firm and earn money. Then what do I do? Where do I invest the money that I earn? Do I let it sit in my provident fund or is there a better way to utilise the money and at the same time make it grow?
I used to hear terms like Blue Chip Funds and seriously look away thinking I didn't want to delve into it. But one day, I told myself that maybe I was done looking away. Sooner or later I had to understand these terms and trust me when I say that even though it's hard, there is nothing better than facing your fears. Because until you face it, you do not know the beauty of it, or the enormous potential that it has to offer.
As I began facing my fears I realized that okay maybe If I break these terms down into simple English, words that you and I can understand, it won't be that hard. Trust me that's exactly what it is. For example, Blue Chip is simply something that is considered a reliable investment. That made me ponder, this isn't so hard.
Let me delve in more... Every time I heard of the term Demat account, I used to think of it as probably a vault or something that is too far out of my reach. But let's try to break it down: Demat is short for Dematerialised, which implies something that is not in material or physical form, meaning an account that stores a financial purchase you make in an electronic format. Lo and behold! This makes sense now!
This is exactly what Financial Literacy is! Breaking down words in finance into a language that we all understand.
What is the need for it? According to an S&P 500 survey, India with its vast population of youth does not have even 25% of financially educated people. Yet, on a daily basis finance impacts each day of our lives, be it budgeting, interest rates, RBI's policies, GST, loans, insurance, you name it.
So let's stop running away from it. Let's embrace it and you know what let's make it our best friend and believe me you will never jump from the international section in a newspaper straight to the sports section without reading and understanding the business section of the paper.
Join us in building a community of finance learners and feel free to reach out to us to help make financial terms simple and understandable!
Originally published at The Fin Lit Project on 14 May 2020.