Want to Lead a Bright Financial Future in 2022 and Beyond? Sharpen Your Financial Literacy
December 31, 2021 Mutual Fund
The year 2021 is coming to an end, and there’s no better time than now to start planning on how to begin the upcoming year on the right financial footing. You may have been thinking of new year resolutions, and the one you must consider is to sharpen your financial literacy which will enable you to enhance your financial planning skills for a bright financial future.
Financial planning is a comprehensive exercise that involves setting goals, getting out of debt, budgeting, insurance, investments, retirement planning, taxation, and estate planning etc. Having said that, financial literacy will help you understand the nitty-gritty of financial planning and investment management, which gives you a better control over your personal finances.
Given the current environment, where financial stability plays an important role, and the fact that uncertainty can knock on your door at any time, safeguarding your financial future is extremely crucial.In order to lead a bright financial future which everyone today aspires sharpening your financial planning skills and empowering yourself with financial literacy is the key.
You see, when you understand the financial nuances better you can handle money effectively and invest smartly. And the only way to do that is to arm yourself with financial knowledge as a weapon.
Despite the fact that many of you want to strengthen your financial future and attain your financial goals,the picture of financial literacy is gloomy.
Although financial literacy has become one of the top priorities for most countries, many individuals still lack the basic understanding of financial engagements. India is home to around 17% population of the world, with a literacy rate of around 74%. However, out of the total population in India, as per the report conducted by Global Financial Literacy Excellence Center, only 24% of Indians are financially literate. The journey to a financially inclusive India is futuristic. The Reserve Bank of India (RBI) is working hard to ensure that India’s population is financially aware.
The Reserve Bank of India (RBI),on August 20, 2020, last year has launched the National Strategy for Financial Education (NSFE) 2020-25 to disseminate financial education in the country. It is a strategy to instil financial literacy concepts among Indians, encourage active savings behaviour, and increase financial market involvement.
Financial literacy provides you with the adequate knowledge and confidence to manage, save, and invest money for yourself and your family in an efficient and successful manner.
Some of you may be thinking it will be better to hand over your financial planning to a professional who is an expert with appropriate financial knowledge. However, the world of finance is complex, with multiple financial products or services and investment avenues that are often mis-sold. Very few financial advisors put their client’s interests at the fore and manage hard-earned money with enough care and prudence.
Instead of fully relying on your financial advisor, you can equip yourself with financial knowledge and enhance your financial planning skills in this upcoming year. In today’s fintech world, there are vast resources available for you online that can assist you in broadening your financial outlook and sharpening your financial knowledge. In addition, financial literacy will enable you to ask precise questions to your financial advisor and maintain better control over your financial planning. It will also help you to avoid being mis-sold any financial product that may not be suitable for your needs.
“An investment in knowledge pays the best interest,” wrote the legendary investor Benjamin Graham in his book: The Way to Wealth.
Doyou want to sharpen your financial knowledge this new year, but don’t know where to start?
Let me guide you with few ways to improve your financial literacy, follow the below mentioned steps:
1. Start with basic read up on financial topics
You can start with reading basic financial information. Make it a habit of reading about sections of finance in newspapers and magazines, diligently read publications that cover financial news, you will get ample of information. Newspapers and magazines play a very important role through their extensive coverage, tips and tricks and advise related to financial concepts. There is a vast information available in the online world as well and it can be a good place to brush up on a few financial terms.
The internet has become a great place for learning, a simple search online should be enough to give you plenty of information around any financial concept. Reading information related to financial topics will help you improve your financial knowledge, learn financial concepts and stay up to date with the latest news in finance.
In addition, you may consider reading finance books, which will guide you from understanding basic financial concepts to creating a financial plan for yourself. Books may contain deeper information because of the longer format, the finance authors can delve a lot deeper into the financial topic and you can get a richer understanding. Some good finance books you could start reading are:
- “Rich Dad Poor Dad” – by Robert Kiyosaki and Sharon Lechter
- “I Will Teach You to be Rich” – by Ramit Sethi
- “Spend Well, Live Rich” – by Michelle Singletary
2. Listen to Finance Podcasts
Apart from reading about financial topics, you can listen to finance and money management podcasts. Typically, podcasts are audio or video recordings of a lecture, a performance, or another event. It has finance professionals discussing a variety of topics, which you may listen to at your leisure. Whether you’re at home, driving, jogging, or doing household tasks, you can simply turn on a podcast on a financial topic of your choice and listen to financial experts share their knowledge. Such podcasts are available on a variety of digital networks, and they will help you improve your financial knowledge while you go through your everyday activities.
3. Enrol for a financial course
Now that you are familiar with financial terms and basic concepts after grasping effective financial information, you may consider to enrol for a financial course. There are various in-person and online financial courses available to help educate you about money management skills and investing. Especially considering the current environment a financial e-course could be a good option. Financial literacy courses can be great because they provide top-notch information, and many times they are interactive.
You need to select an effective financial course that improves your financial knowledge helps you understand the nuances of financial planning and guides you in the following aspects:
- Defining S.M.A.R.T financial goals
- Budgeting strategies
- Investment planning
- Insurance planning
- Ways to debt reduction
- Importance of contingency fund
- Retirement planning, etc.
I would suggest you enrol to PersonalFN’s exclusive new certificate e-course, the “Certified Family Guardian”. This e-course is truly empowering separated into eight modules with 24 extensive videos, that enhance your financial literacy and assist you to become your own financial planner with the help of its premium tools. You can equip yourself with financial knowledge under this course and be your family’s financial guardian that makes informed financial decisions for a secure financial future.
4. Use financial apps and tools
We are living in a fintech world where everything from food to finance is easily available on your fingertips. The advancement of technology in the finance world has created various financial apps and tools which is another interesting way to sharpen your financial knowledge. Financial tools and apps can be a great way to improve your financial knowledge and learn financial planning skills.
Such tools and applications, have in-built artificial intelligence systems such as robo-advisors that provide you relevant information and help you in managing your finances. One of the best ways to act on what you’re learning is to take action,there are so many financial management tools out there that can help you take action. You can plan a budget with the help of these tools, make worthy investments online and gain financial market information. However, you need to feed in some basic financial information and automated algorithms do the rest for you.
In addition, these online tools can perform tasks such as it helps you calculate your EMI, taxes that you would need to pay, documents you need to fill for any investment purpose. Notably, there are few apps that take it a step further. For instance, after you feed in your basic financial data it can compute your taxes and recommend the best tax saving instruments for you. Using such financial apps and tools will definitely sharpen your financial knowledge and help you keep up with the advancements in finance.
5. Get help from financial experts
Last but not the least getting an advice from a financial expert/professional is another way of improving your financial literacy. A financial professional can answer your financial queries, whether it is about the basic day-to-day money situations or more complex financial planning scenarios. Once you have got some basic financial knowledge on the subject you seek information, greater in-depth insights can be provided by financial experts who deal with the matter.
However, financial experts should not be confused with financial advisors, as financial advisors help you with wealth creation and investments and don’t do as much with your financial literacy. Financial knowledge can help you in asking the right questions to your financial advisor to ensure if there is no mis-selling of financial products. You can simply connect to many websites that provide expert guidance and help you enhance your financial literacy. Financial experts can certainly help you identify gaps in your financial knowledge and point you to resources that enhance your financial literacy.
For millennials who want to sharpen their financial knowledge, there are various financial experts available on social media platforms. Maybe reading a book to improve your financial knowledge is not a millennial mindset, as they are the tech savvy generation and prefer things to be easily accessible and truly bite-sized.
Social media attracts the millennials it has several accounts of financial experts that keep imparting financial knowledge and concepts with various target audiences, ranging from novice to expert. You can sharpen your financial knowledge by listening to these financial experts as they share the financial insights.
To conclude:
No matter your current financial literacy level, it’s important to keep your knowledge base growing. The goal is, to begin with, the idea of being financially literate.Knowledge is power and can help you make more wise and confident financial decisions.
A sound grasp of financial principles can help you understand and negotiate the financial landscape, manage financial risks, and avoid financial pitfalls. Financial Literacy will assist you in accumulating wealth, attaining goals, safeguarding yourself in the event of an emergency, securing your family, and leading towards a bright financial future.
However, one must be wary that not all information on the Internet can be reliable. It Is advisable that you do not make your financial decisions solely based on what you pick up on the Internet or messages circulating on Whatsapp or other similar apps. Make an informed decision after understanding the pros and cons and don’t hesitate to seek help of unbiased professionals if necessary.
With that in mind, let’s take a step this new year towards sharpening your financial knowledge to better understand your financial situation and enhance your financial planning skills for 2022 and beyond.
This article first appeared on PersonalFN here
