The Role and Importance (Financial Literacy) in Personal as well as Professional Life For Safe Future

In today’s unprecedented times, the importance of financial literacy cannot be underestimated. Uncalculated investments, bad debts, and frivolous spendings could become reasons for financial struggle in the future. We need to address financial understanding beyond monetary benefits. A profound financial literacy can be a boon for safe personal and professional growth.

What is financial literacy and why is it important? 

Financial literacy is a holistic approach towards understanding financial, credit, and debt management that in turn helps an individual to make financially responsible decisions that are an integral part of our daily lives. Low financial literacy has left millennials—unprepared for a severe financial crisis, such as the coronavirus pandemic. It includes awareness around how credit works, how to check account balances, or how to avoid debts.

It is necessary to understand that all of this awareness impacts an individual’s personal and professional lives as we try to create a balance of our vision and turning our dreams into reality. To avoid financial pitfalls a strong grasp on the financial basics helps consumers manage financial risks effectively.

Financial literacy is a confluence of many financial planning skills such as budgeting, managing expenses, paying off debts, and understanding risk returns. To acquire these skills one needs to understand financial concepts like time value of money, compound interest, annualized return, opportunity cost, etc.

Currently, there are a number of credit products available in the market like credit cards, overdraft facilities on debit cards, EMIs, flexible loan options, etc. To make the most out of these products an individual has to be financially literate.

Like knowledge in any field helps one to take analytical decisions similarly financial literacy increases financial discipline and capability. It teaches individuals to make major financial decisions.

Financial well-being enables one to lead a lifestyle of his own choice and at his own pace through systematic investments, managing debts effectively, and fulfilling life goals. Additionally, it also protects individuals from financial fraud.

How does financial literacy impact personal and professional lives?

The need for investments and passive income is essential in today’s times but there is a lot of confusion and a lack of clarity on the pathway to the same. Savings is a foundation towards finances undoubtedly but toxic investments can ruin these roots of your wealth easily.

It is an absolute necessity to be aware of the financial world and its functioning from a bird’s eye view. We are all politically aware, fashionably updated, quite active about our social media accounts then why not personal finances!

Fundamentally, taking care of one’s health is a priority. Wealth is undoubtedly the next bullet point on your priority agenda.

Financial literacy impacts an individual’s personal and professional lives. Personally, he becomes stable enough to take care of his family, buy property, secure children’s future, and build a lifestyle of his own. It reflects his personality and financial well-being that keeps him motivated and enthusiastic to fulfill his life goals.

Professionally, one’s career has lots of ups and downs that turn into learnings. Similarly, it also involves the dynamic nature of an individual’s financial life. Young professionals might look into finances from a different perspective than a middle-aged person. Investments may be in equity, mutual funds, and retirement planning.

Financial literacy teaches one to understand their financial needs and priorities that change over time.

The bottom line is implementing the basic knowledge and understanding of finances certainly helps in the long run but also helps in day-to-day micromanagement and building discipline towards money management.

Khasnis Prime Wealth takes care of all your financial needs with a wide range of financial services that create and manage your wealth efficiently. For further details, drop in your query today.

Reference: Infographics

Here’s To Embracing Financial Literacy In 2021

Financial Literacy In India And Its Huge Importance In 2021