Financial literacy is hailed as a necessity in today’s world. We dedicate years to master the art of earning, saving and investing, to ensure not a single penny goes to waste. This article provides a brief overview about the importance of financial literacy and the ways to improve this important skill, simultaneously addressing a more pressing question about the hidden bankruptcy faced by most humans today.
Meaning of Financial Literacy
Financial literacy is the ability to apply one’s understanding of finance to make informed decisions about personal finance, budgeting, investing, saving and also in managing personal debts. With the advent of newer financial tools and systems, financial literacy has turned into a necessary life skill for almost every employee.
Importance of Financial Literacy
The importance of Financial Literacy can be understood in the following aspects of life:
Budgeting and Managing Debt
As inflation escalates, budget and debt are two words ruling the lives of most employed individuals. Financial literacy helps plan your personal budget better as you are able to manage your expenses more efficiently. It also acts as a shield protecting one from falling prey to the vicious debt cycle. For example, a financial literate is aware of their credit card cycle and high interest rates on the outstanding amounts.
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Therefore, they are likely to pay their credit card bills on time, plan their purchases keeping their billing cycle in mind and not overspend to avoid mounting debts.
Preparing for Emergencies
An important aspect of financial planning is building an emergency fund overtime from your monthly income. Financial literates most often do not ignore this and build a sizable financial cover for adverse situations. According to finance experts, procuring health and life insurance is also part of building an emergency cover.
Building Wealth
Savings are an important part of the Indian cultural fabric. However, a financial literate goes a step further by investing his money in various investment tools like Fixed Deposit (FD), Pension Fund (PF), mutual funds etc. Slow and steady investment can compound into bigger savings with time.
Retirement Planning
Financial literacy with respect to retirement planning is not just understanding the pension plans, but also evaluating various investment tools to plan savings at one’s retirement age. A comprehensive retirement plan considers individuals expected lifespan and potential healthcare costs.
Avoiding Financial Scams
Knowledge of financial concepts can protect individuals from falling victim into the trap of fraudulent schemes. For example, ponzi schemes target people who are illiterate and unfamiliar with investment principles by promising high returns with less risk, thereby duping them of their hard earned money.
Benefits of Financial Literacy
Financial literacy is a skill that can improve financial stability.
Additionally, given below are some benefits of being financially literate:
- Better ability to make more informed personal and business decisions.
- Effective management of money and debt.
- Improved balancing of costs and savings.
- Better plans for becoming financially secure.
- Less financial stress and anxiety.
Ways to improve Financial Literacy
Take online courses
- Online platforms like Coursera, Khan Academy, Udemy, etc., offer beginner-to-advanced personal finance courses.
- It is effective to choose courses on topics like retirement planning, investment strategies and tax planning.
Read Personal Finance books
- Popular personal finance books like Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter, Your Money or Your Life by Vicki Robin and Joseph R. Dominguez, are some options to choose from.
- Magazines like Forbes, The Economic Times are also great sources for improving financial knowledge.
Attend workshops and seminars
- Attending the virtual financial literacy workshops organised by banks, communities, or financial advisors on tax planning and budgeting.
Review your Financial Goals
- Set short-term and long-term financial goals.
- Monitor your progress and regularly track your costs and savings.
But despite following steps to efficient financial planning, we often fail to recognise the biggest wealth crisis we are undergoing today. Dive into the final part of the article to uncover how your real wealth is silently depleting.
Avert the Silent Wealth Crisis
Human’s relentless efforts to achieve financial security speaks volumes about our extreme attachment to the material world. We meticulously plan, save, invest and strive for financial security to save every penny earned. However, an unknown and unseen segment of our invaluable wealth, our spiritual fortune, is depleting steadily without our knowledge.
Jagatguru Tatvdarshi Sant Rampal Ji Maharaj reveals that the precious human birth is a rare blessing granted due to accumulated good karmas that add to an individual’s spiritual wealth. However, the singular true objective of a human birth is not material gain, but seeking the refuge of a Tatvdarshi Sant (Complete Saint) and pursuing the authentic worship of Supreme God Kabir, the Eternal Creator. Our failure to walk on this divine path steadily erodes our immense spiritual wealth, ultimately pushing us to the endless cycle of birth and death into 84 lakhs animal forms.
Discover the transformative power of the true worship of God Kabir as revealed by Sant Rampal Ji Maharaj, the only Complete Saint in this world. His enlightening spiritual discourses unveil the hidden realities of human existence and the path to eternal liberation. Act before your greatest wealth slips away by visiting:
- Website: www.jagatgururampalji.org
- Youtube channel: Sant Rampal Ji Maharaj
- Facebook page: Spiritual Leader Saint Rampal Ji
- Twitter handle: @SaintRampalJiM
