Being financially literate means, you have an understanding in few core areas:
• Budgeting and setting financial goals
• Handling emergencies like job loss, accident, hospitalization, death, etc.
• Paying bills and saving money
• Basics of loans (personal, debt, mortgages, etc.)
• Credit cards and credit scores
• How investing works, pension plans, mutual funds, the stock market, etc.
Financial literacy is not something you will magically know either.
Majority of schools are not teaching personal finances to students. Parents and family may be misinformed or lack a deeper knowledge that children cannot learn from.
What should one do?
Unless you take some economics courses within your education path, becoming financially literate is on YOU.
Yes, you can blame the education system, your parents, your environment, etc.
While they can all have some affect, this is still something you ultimately control. You alone have the ability to change your lack of finance knowledge.
Read the above over again because I think it is important.
Harsh truth? Maybe. But no one is truly going to hold your hand and show you the way.
Even if someone in your life does arm you with some money and investing insights, it’s on you as to what you do with that information.
The good thing is, many school districts are starting to add classes to the curriculum. But it has a long way to go until it is universally adopted.
How to Achieve Financial literacy On Your Own?
Again, since you might not have had any classes or had much insight, it’s up to you to become financially literate.
Luckily, with the digital age and abundant amount of information, you can learn finances relatively fast.
Everyone is at a different learning curve and pending your life’s schedule, it may take you some time. So, I recommend you go at your own learning pace.
That being said, here are some simple ways to help you become financially literate.
1. Hit the Books
In order to get started, books will become key in your quest to be financially literate. It was crucial for my learning, especially coming from no background in finance or investing.
Dedicate a minimum of 1-2 hours each week to reading books about money management, investing, finances, etc.
2. Read Magazines and online Publishers
I find books to be the most important, but magazines and online publications can be equally important to your financial education. Publications like Economic Times, Financial Times, Fortune, and there are tons of personal finance bloggers (like me). Also, websites like valueresearchonline.com, moneycontrol.com, fvindia.com, finviseindia.com, Investopedia, MarketWatch, etc. have tons of useful information, online calculators, and more.
3. Use Financial Management tools
Managing your finances and money doesn’t have to be hard or boring. Thanks to tech and the internet, there is an abundance of tools to help you be more proficient. But besides helping you organize and visualize your financial life; you end up learning a lot too. Many of these tools have great learning centers or blogs.
4. Listen to Money Podcasts
Being able to dedicate time to reading can be challenging. You may have a busy work and family life, which is exactly why podcasts are perfect.
Podcasting is huge! And there are many great ones you can listen to on your way to or from work, doing chores, or even at work (if it doesn’t disrupt your productivity). Too many good ones to list, but many might be 10 minutes long, to almost an hour of strong info. free education you can listen to! Here is a great list of some of the best finance podcasts.
5. Take a Financial literacy course
So, besides books and online publications, you can totally get involved in a financial literacy class or course. Whether that is at an online school, college course, adult education center, etc. This is if you feel you want to go a step further or need the structure to learn. Many are paid, but there are some free courses online that can be a great educator.
6. Get Your Math on
To be financially literate, you’ll need to bust out some most basic math skills. Brush up on some math or look into some basic formulas that can help you organize your money, savings percentages, etc. I know spreadsheets can make this easier or software will do the math for you. It’s fine if you do, but know how the math works, why it’s that number, and if you needed to that you could calculate that yourself.
7. Break Your Consumer Mentality
A big challenge for many Indians, is we have a consumer mentality. But’ it’s really unavoidable at first. We are targeted with ads everywhere, media promotes lavish lifestyles, social media makes of envious of others possessions, etc. Over your financial literacy journey, you’ll learn to break the consumer mentality and developer an investor mentality.