What is Financial Literacy and How to Achieve it
Financial literacy may refer to as the amalgamation of various financial terms used in day to day life such as the knowledge of having digital banking, basic financial concepts and are able to manage their personal finances. It is not only confine to having knowledge of financial techniques or investments but also about what comes under the domain of it. It is a valuable life skill which if learnt can help the common people to have a say on the budget and other policy review which comes under the annual financial document. In contemporary times where the Government of India with their schemes like direct benefit transfer of subsidy of cooking gas, direct credit of their received allowances to their bank accounts, have started a wave of revolution in which every possible effort has been made for the citizens to know the difference between what can be the advantage of having a cashless transaction to a certain extent. Having said that financial literacy for a common household person can also mean questions like how to adjust their savings and expenditures, for a share market assess, which share can be of maximum return and more a student what can be the career choices in future if one goes for studying finance as a subject. These whole sort of things reflects the importance of financial literacy in modern times. The ways to achieve financial literacy needs to be categorised into two different domains, one of which is the urban commoners and other the rural commoners. The adaptability, situational process for both the sides are different and needs to be tackled differently.
For the urban dwellers the ways to achieve financial literacy are as follows-
- Making newspaper reading a frequent habit– Though for most of the people newspaper reading is a morning ritual; yet due to heavy workloads and deadlines most of the people give it a skip. This in turn restricts their knowledge buds. Going through the financial news of the newspaper can give a upper hand to them who wants to understand financial terms revolving around in the economy
- Surfing the internet for good – As everything we want to know is just a click away, it is advisable to search for various websites like policy bazaar.com, money control, economics times market website, live mint are some of the best curated websites where simplicity is the ultimate sophistication. Here people can go through and have the best solutions for their queries.
- Make the best use of Reserve bank of India – The RBI website is a treasure hunt for those who wants to know what can be the recent changes in CRR (Cash reserve ratio), SLR (Statutory reserve ratio) the two most important banking tools to judge the interest rates.
For the rural population the ways to achieve financial literacy are as follows-
- Financial awareness camps– It will be of so much help, if financial camps are being held twice a month where financial experts would travel to the remote areas and deliver lectures of what financial literacy is all about. This should start from the basic account t opening procedure to get their benefits direct into their bank accounts.
- The role of local bodies– to achieve success close to 100 percent there is a need to incorporate the local government into the financial inclusion as well as literacy process. The panchayat raj institutions, municipalities and various councils can help in identifying areas of concern.
- The adaptive use of technology– No doubt technology plays a significant role in shaping the minds of people, this might not be the cause of the rural population. Content helps in localising the theory behind a certain idea or motive. When it comes to rural population it should be kept in mind the ways in which financial literacy is delivered needs to be simple enough to adapt. Complexities will hinder the process and hence the outcome may not be satisfactory. What is needed is to make use of simplicity at its best to conquer the thoughts and avoid complicacies.