Importance of financial literacy in 2024

It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for

-Robert Kiyosaki, Author of “Rich Dad, Poor Dad”

Finally, the day has arrived when we post our first blog after multiple indecisive attempts. It is true when Robin Sharma said, “Everything is created twice, first in the mind then in reality.” We have already built our blog in our minds and enjoyed the process thoroughly but now it’s time to materialize it. In this post, we will discuss the importance of financial literacy in 2024.

Motivation to start the blog

The motivation that drove us to start our blog was to educate people financially and make them aware of financial jargon to build their minds into an adaptive one that can keep up with the changing economic conditions of this fast-paced world.

5 reasons for being financially literate

Financial knowledge plays a pivotal role in shaping our lives. Many a time we find ourselves confused and unable to choose from various money-related choices in our life. Our pockets are full of dollars but we are incapable of managing our expenditure. You would be surprised to see the outcomes when you are mindful of your choices, how smart choices compound into a greater good, and how saving a portion of your income can grant you financial freedom early in life. Although most people ignore the idea of saving, the few people who have adopted the habit are already reaping the ripe fruits.

Common questions that arise

The new world has moved on from saving into investment. We come across many questions like, Is the stock market real? Is it risky? What would be the better investment- stocks or bonds? Would it be better to buy some real estate and live off of the rentals? To make these crucial decisions where your hard-earned money is at stake, you need to be aware of the principles governing all of these mechanisms, of all the investment options.

Awareness of the “terms and conditions”

All the money you earned after hours of hard work would ultimately be drained by the policies which you would realize much later when you file the income tax return. Those who are aware of the system and the legal procedures at play behind these policies are the ones who would be able to cut down taxes leading to fuller pockets!

You go to the bank and ask for a loan for some specific purpose. You may not be aware of the hidden charges, the E.M.I. procedures, or the complex repayment methods. Debt is very important when you are buying assets and not liabilities. People, institutions, and major economies grow when they invest in assets and let the money multiply itself over the years.

Money-myths and misconceptions

In this free world, everyone has something to say, something to give. With this arises the blunders caused by money myths and misconceptions which break the trust of the one who is ill-informed about it. Some say- you need to be rich to invest, renting is throwing away your money while owning your house is always good. We can start anytime and you need not be rich. Renting and owning is a personal choice that has many technicalities.

Planning for the future

Life is a maze, and until you have well-defined goals to guide you, you will be wandering around making it difficult to achieve the dreams you desire and deserve. Everyone dreams of owning a luxurious penthouse, but turning this daydream into reality requires an understanding of how money works and how markets operate. We love our children second to none and everyone wishes to provide them with the best education they can, in hopes of skyrocketing their careers. Retirement plans also require planning from the very early stages of your life, your 20s, to love carefree without tension in the world when old age finally hits.

Emergencies

Sometimes we find ourselves in unexpected situations where a lot of our savings is depleted in the blink of an eye, like accidents, or major health issues. These times call for an emergency fund, which would serve as a shock absorber and grant a safe financial recovery from the worst of the situations.

There is a single answer to all the scenarios listed, yes you guessed it, financial literacy which is not a luxury anymore but a necessity in this competitive era. So here we are today, ready to start our journey to financial freedom! Providing financial literacy in all aspects of life to as many people as possible would be the goal we plan to achieve through our upcoming posts. Thank you for sticking around till the end, hope to see you around, but until then, ciao ciao!

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