Wall Street to Main Street: build your finance knowledge
Having money may not be sufficient. One has to be equipped with financial knowledge to take correct financial decisions, be it in personal or professional life. It is important to know that even experts can make mistakes or the 2008 crisis would not have transpired. Despite that, having a certain amount of financial knowledge can help you grow your money.
According to a
2015 survey by Standard & Poor’s Financial Services LLC (S&P), 25% Indians have financial literacy. While at a global level this number is 33% while 57% people in the US have financial literacy. This shows that India is lagging behind in terms of the global average of financial literacy and is below the halfway mark compared to the US. This calls for an increased effort to increase financial literacy in the country. Globally also, financial literacy rates must increase.
Financial literacy is the ability to understand one’s money and put it to its best use, i.e. growth. Money can grow if one has the skills and knowledge to convert their resources into a steady income stream for the rest of their lives. It is important that our basic needs i.e. payment of various bills such as food, rent, electricity, medicine etc. are taken care of. Having financial knowledge can also help you understand how to plan your retirement better as well as the working of the economy.
Understanding how the economy works will slowly help you understand the various nuances which can further help you in growing money. It is important for one to understand how they can invest their own money in ways which will be less risky and which help their money grow at a decent pace. While there are a number of financial experts, agencies and institutions which manage billions of dollars worth of money, their fees usually cost a bomb.
If you are someone with modest means, looking to grow your money, you might just end up spending a big chunk on the fees itself or worse, may not be able to afford them at all. This does not mean you cannot grow your money. With the right knowledge, skills and tools one can make their money grow. In order to enhance one’s financial literacy one can take advantage of several finance courses online.
Financial inclusion and education initiatives in India
The Reserve Bank of India and the Indian Government have recognized the need for financial inclusion of its vast population. Since digital technology has spread to the grassroots level in the country, the government wants to leverage the same to include greater part of India’s population into the financial fabric. Creating physical infrastructure is tough and expensive but reaching out through mobile and web technology is possible.
The Reserve Bank of India has created a vast repository of knowledge in this regard and uploaded it on its website for the use of the general public. Available in 13 Indian languages, this knowledge bank is extremely helpful in enhancing the financial knowledge of the people in the country. This knowledge bank is helpful for bankers and common masses alike. It will help people understand different financial services, financial products, good practices with regard to finance, digital finance and protection of consumers.
The booklet that provides this knowledge is called “FAME” or
Financial Awareness Messages. General public in the country can benefit from basic financial literacy with the help of this booklet. It talks about eleven product neutral messages such as use of KYC and the documents to be submitted for the purpose whether opening a new account or updating an old one, how and why budgeting is important, importance of saving and borrowing with responsibility, the importance of good credit score and how you can enhance it by paying up loans on time, investment of money into entities that are registered etc.
The RBI has also developed certain audio-visuals to help public to understand financial topics with a certain degree of engagement and entertainment. These audio visuals are great for people who are not otherwise literate and hence, cannot read or write. Even such people can become financially literate by watching and listening to these audio-visuals. These audio-visuals are available on topics such as Basic Financial Literacy, Unified Payments Interface and Going Digital.
Knowing and understanding your own money is important in today’s fast paced time with decreasing purchasing power parity and increasing inflation. Instead of handing out your money to investment experts, it is possible for you to do so yourself by building your financial knowledge. With the Indian government coming to your aid and several finance courses online, you can now do this with ease.
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