December 15, 2015
5 reasons for spreading financial literacy in india
In today’s world, it is very important for everyone to be financially literate. You have to go ahead and understand how your hard earned money can yield better returns. You have to understand how global and local businesses work on a financial platform.
According to a recent survey, we Indians stand in second position among the leading nations in the world just after Japan. But in reality, there is a great disparity among the urban and rural population. The vast majority of the population are devoid of basic education in a country where there is a separate Right to Education Act. Education is our birthright and the country’s progress are directly related to the level of education in the country. The following are the reasons why it is important for a country to be financially literate-
- Financial education should start at an early age – It’s always better to start early to those things which takes a long time to happen just like our equity investments. Warren Buffett has made his first investment when he was only 11 years of age and he feels that he started late. In our society, we don’t even think of making investments at the age of 21. Financial education is very relevant at an early age since younger kids have greater temptations, have more debt in general and does not understand the importance of savings. It’s very important for the parents to give this money related lessons to their kids at an early age so that they understand the value and importance of money.
- The problem is widespread – The problem of financial literacy is widespread in India, especially in the rural areas. It’s a matter of shame for the country that one side, we boast of landing into the second position among the top nations in the world in terms of financial literacy level. On the other hand, the vast majority of Indians are devoid of basic financial education. Around 70% of Indians still lives in the villages and have no access to basic education. Most of the problems like poverty, booming population etc stems from the lack of adequate education. The government should look into this matter seriously and should come up with a large number of schools in the rural areas with good infrastructure and skilled manpower. As we all say that food, clothing and shelter are our basic needs, but I believe education is no less important and it deserves equal importance to be included in that list.
- Certain group of people requires special attention – Certain section of society, especially the females, kids and the old age people requires special attention. The female literacy rate in India is very low compared to the males. Women in our society play a variety of roles from educating the kids to looking after the house to managing the family expenses. If adequate financial education is provided to them, it can be a game changer. Moreover imparting financial lessons to older people is equally important as they can guide their families to go in the right direction. Moreover, their huge experience when combined with the right set of knowledge can really help the family prosper.
- To avoid misleading by the agents – It is seen that most of the people are often mislead by their sales or insurance agents just for some penny benefits. Educating the common masses with the right set of knowledge would help them in understanding the questions and the solutions explained by their financial advisor. It will also help them to decide that which product would be more appropriate in satisfying their need.
- Teachers should be given the right set of training – Financial education is an important area and it must become the part of the curriculum in our schools just like any other subjects like science or maths. We all spend our initial 15-20 years of our life with our teachers and the guidance under a right set of mentor gives your career a good momentum. Most of the teachers in our school are not well qualified to teach financial education lessons. Hence, teachers should be provided with the right set of training to impart financial and money related lessons to the students.
These financial lessons can really be fun at times where you come to know of people who had made or lost lots of money. These lessons not only help in the development of the individuals, but also helps in the country’s progress. The higher the financially literate people in the country, higher is the investments which ultimately lead to the development of the entire nation. It also helps the country to avoid the situations of economic meltdown.
It is often seen that when a country has more well informed consumers, the higher is the level of competition in the country and more efficient is the market. You can educate yourself for free to gain financial wisdom so as to take our country to No. 1 position in the near future surpassing Japan.