What is Financial Education?
Financial education means understanding your money – where it comes from, where it goes, how it grows, and how it is saved. It is not just about checking the bank balance or withdrawing money from the ATM. It is about understanding concepts like budgeting, saving, investing, loans, insurance, and retirement planning. People in India often say, “Bhai, money does come, but we don’t know where it goes!” Financial education puts an end to this confusion.
Financial Literacy Scene in India
Now let’s talk about our country. To be honest, the level of financial literacy in India is a little low. According to a survey (National Centre for Financial Education, 2019), only 27% Indians are financially literate. That means, 73 out of 100 people don’t know basic money management! This number is a bit shocking isn’t it? Because in India money is a part of everybody’s life – from the chaiwala to the corporate guy, everyone runs after money. But how many understand?
People here often invest their money in fixed deposits (FD) or buy gold and think that their investment is done. But what is inflation, how do mutual funds work, or what is the potential of the stock market – most people do not know these things. And when it comes to loans or credit cards, the confusion increases even more.
Why is Financial Education necessary?
Now the question is – why do we need financial education? Brother, money is like oxygen in life – it is difficult to survive without it. But if you do not control the oxygen, then hyperventilation happens, right? Same thing happens with money. If you do not know how to manage money, then either you will remain poor, or you will get tired of running after money.
For daily life: daily expenses, bill payments, and saving for emergency – all this becomes easy only with financial education.
Future Planning: Marriage, children’s education, retirement – money has to be saved for all this. How will it happen without planning?
Saving from debt: Have you ever felt the burden of credit card bill or EMI? Financial literacy teaches how not to get into unnecessary debt.
Increasing money: Saving only will not work in the era of inflation. Learn investing, then your money will increase automatically.
What are the problems in India?
There are some challenges with financial education in India which make it tough:
Lack of awareness: Many people do not know what financial education is. They think it is only for the rich.
Traditional Mindset: “Buy Gold, do FD, it is safe” – this thinking is still very common. People are afraid of new options like mutual funds or stocks.
Language Barrier: It is difficult to understand financial terms in English, and there is less content in local languages.
Fear of Scams: People are afraid of investing because of Ponzi schemes and frauds.
No School Education: Maths is taught in our schools, but not budgeting or investing. This gap is a big problem.