{"id":4293,"date":"2022-03-12T13:10:55","date_gmt":"2022-03-12T13:10:55","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=4293"},"modified":"2022-03-12T13:10:55","modified_gmt":"2022-03-12T13:10:55","slug":"financial-literacy-in-in-india-its-significance","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/financial-literacy-in-in-india-its-significance\/","title":{"rendered":"Financial Literacy in in India &#038; its Significance"},"content":{"rendered":"<p><strong><em>Don\u2019t be just Literate become Financially Literate As Well<\/em><\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-4294\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/03\/Dont-be-just-Literate-become-Financially-Literate-As-Well.jpg\" alt=\"Don\u2019t be just Literate become Financially Literate As Well\" width=\"851\" height=\"566\" \/><\/p>\n<p><strong><em>Financial Literacy and its Significance:-<\/em><\/strong><\/p>\n<p>Being financial literate is extremely pivotal in this era of globalisation where there is huge rush towards gaining more and more financial independence. Financial Literacy in simple words refer to the idea of being aware about different financial components and skills that is needed to adequately manage the finance. These components and skills include- Borrowing, budgeting, investing, taxation, and personal financial management viz household budget management. The lack of cognitive understanding, awareness and skills of financial management is termed as Financial Illiteracy which may cause the person to be more vulnerable in this global village. Financial literacy also help the person to acquire effective and efficient money as well as debt management targets.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d2b7344e80a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d2b7344e80a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/financial-literacy-in-in-india-its-significance\/#Elaboration_of_components_of_financial_literacy_is_as_follows\" title=\"Elaboration of components of financial literacy is as follows :-\">Elaboration of components of financial literacy is as follows :-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/financial-literacy-in-in-india-its-significance\/#Significance_of_Financial_Literacy_are_as_mentioned_below\" title=\"Significance of Financial Literacy are as mentioned below:-\">Significance of Financial Literacy are as mentioned below:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/financial-literacy-in-in-india-its-significance\/#The_Idea_of_Saving_Money_its_Benefits_and_Significances\" title=\"The Idea of Saving Money &amp; it`s Benefits and Significances\">The Idea of Saving Money &amp; it`s Benefits and Significances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/financial-literacy-in-in-india-its-significance\/#Some_of_the_ways_of_effective_saving_are_as_follows\" title=\"Some of the ways of effective saving are as follows :-\">Some of the ways of effective saving are as follows :-<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Elaboration_of_components_of_financial_literacy_is_as_follows\"><\/span><span style=\"color: #333399;\">Elaboration of components of financial literacy is as follows :-<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Borrowing- It refers to taking money from an individual, banks, other financial institution etc for the purpose of fulfilling one`s financial requirement. For effective borrowing one must be well aware about the prevailing interest rate, terms and condition of borrowing, compound interest, payment period, time value of money and structure of loan. The lack of these basic ideas related to borrowing may harm the borrower as he\/she may get exploited by the lender because of lack of knowledge regarding borrowing.<\/li>\n<li>Budgeting- Budgeting the utilisation of money by combining four elements of usage of money that is spending, investing, saving, and lending. In simple words combination of spending, investing, saving, along with lending is called the process of budgeting. A proper and wise balance between all four components of budgeting leads to better allocation of money. While formulating a budget one must make a balance so that any of the component should not exceed the other as the imbalance of any one will effect the overall budget. For example if someone spends more then his\/her saving will reduce and continuously excessive spending may cause the person to go bankrupt.<\/li>\n<li>Investing- Investing is one of the most important components of financial literacy. One must be acknowledged where, when, and how they should invest so that they would achieve high profit rate from their investment. To have a good investing sense one must be aware about interest rate, price levels, diversification, risk mitigation and index.<\/li>\n<li>Taxation- Acquiring proper information and knowledge about various forms of taxation enable a person to enhance his\/her economic status. Different forms of income have different taxation procedure and different tax rate so one must know how much and how they should pay the tax. If a person lacks the knowledge regarding taxation he\/she may get exploited by the tax collector.<\/li>\n<li>Personal Financial Management- It is a criterion which is the combination of all the other component of financial literacy. Personal Financial Management is the household management of money which means proper balancing of money in terms of spending, investing, saving, and lending. One must know how to utilise money without creating any imbalance between spending, saving, investing, as well as lending.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Significance_of_Financial_Literacy_are_as_mentioned_below\"><\/span><span style=\"color: #333333;\"><strong>Significance of Financial Literacy are as mentioned below:-<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Help in creating financial and economic stability.<\/li>\n<li>Easy to achieve financial goals and targets.<\/li>\n<li>Reduce the chance of getting exploited by the lender or by the tax collector.<\/li>\n<li>Help to make good decision related to financial matters.<\/li>\n<li>Less financial risk in investing.<\/li>\n<li>More profit from investment.<\/li>\n<li>Good budgeting knowledge enhance the overall living standard of a person.<\/li>\n<li>Ensures loans at appropriate rate of interest.<\/li>\n<\/ul>\n<p>Some of the online platform to gain financial literacy includes- Carajput, Indiaexpert, Money Smart, MoneyWise.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Idea_of_Saving_Money_its_Benefits_and_Significances\"><\/span><span style=\"color: #000080;\"><strong><em>The Idea of Saving Money &amp; it`s Benefits and Significances<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Saving in simple word is the process of keeping some money or anything for future use. Saving of money not only help a person in long terms but it also helps a person when he\/she is in urgent need of money and his\/her employer is not paying him\/her before the completion of month. If a person saves a specific amount of money from his\/her income then he\/she can use that money for starting a new business, investing in any new financial scheme etc.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Some_of_the_ways_of_effective_saving_are_as_follows\"><\/span><span style=\"color: #000080;\">Some of the ways of effective saving are as follows :-<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Reduce useless expenditure like going for outing, eating in restaurant, buying unnecessary things.<\/li>\n<li>Not buying unnecessary subscriptions of different apps and channels.<\/li>\n<li>Setting no expenditure challenge- Set the target of no expenditure for one complete month.<\/li>\n<li>Make a budget with minimum expenditure and maximum saving and follow that for 6 months.<\/li>\n<\/ul>\n<p>Benefits of Saving is both long term and short term as saving enable us to become financially independent when we run short of money. In a situation when any emergency like accident took place where a lot of expenditure is required for operation then in that case one can use his\/her savings.<\/p>\n<p>It also acts like a helping hand when someone suddenly lose a job in that case one can use his\/her saving for acquiring things of daily need and can meet the subsistence. It also assists us to plan our vacation in case we are bored and want to relax.<\/p>\n<p>It acts as a backbone when someone reach the age of retirement. With the help of saving one can also sponsor his\/her higher education without dropping out from academic field and also without overburdening his\/her parents.<\/p>\n<p>One can also use his\/her saving as a mortgage for taking various kinds of loan which will enable them to gain their requirements.<\/p>\n<p>There are also situations when we run out of money while organizing the wedding, as during a wedding a lot of expenditure took place and in that situation people can use their saving to further carry the preparation of wedding.<\/p>\n<p>There are umpteen situation when we want to finance a car so in that case we can use our saving to buy the car. Saving also help in clearing our debt.<\/p>\n<p>In case of home renovation we can use our savings to fulfil the purpose. Apart from all these there are many other benefits of saving.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Don\u2019t be just Literate become Financially Literate As Well Financial Literacy and its Significance:- Being financial literate is extremely pivotal in this era of globalisation where there is huge rush towards gaining more and more financial independence. Financial Literacy in simple words refer to the idea of being aware about different financial components and skills &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[123],"tags":[882],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4293"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=4293"}],"version-history":[{"count":2,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4293\/revisions"}],"predecessor-version":[{"id":4296,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4293\/revisions\/4296"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=4293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=4293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=4293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}