Here's why financial literacy is a must for youngsters

Here's why financial literacy is a must for youngsters

Mention ‘financial literacy’ and most people feel that it is meant for people who make huge investments or deal a lot with stocks and shares. But that is not how one should look at it. If you want your money to grow, invest and benefit from it in the long run, and make use of financial services to make the best financial decisions, you ought to be financially literate.

However, it is often left out of our educational curriculum because of which only those interested in making a career in finance study it at a later stage. Vivek Bajaj, founder of Elearnmarkets, believes that it is essential to start the lessons early and understand how financial management works. Effective financial planning, proper debt managing, accurately calculating interest, and understanding the time value of money are characteristics of being financially literate.

Elearnmarkets is a young vibrant company established with the vision of taking online financial education to a new level, both in India and abroad. Guided by their mission of spreading financial literacy, they are constantly experimenting with new education methodologies and technologies to make financial education convenient, effective, and accessible to all.

Start early

Bajaj, who is an IIM Indore alumni, has a market experience of more than 15 years. Stressing on the importance of financial literacy from a young age, he says, “Having to learn financial tools to make a career out of it is different, but having the basic knowledge about how they work is critical since they pave the way to financial planning and stability in the long run. As regular individuals, you learn to grow your savings steadily,” he says.

He points out that the ongoing global crisis has brought a lot of focus on words like compounding, savings, stocks, liquid and equity and so on, and for a person who has zero knowledge, s/he can be easily confused and wouldn’t know where to start.

“These terms have been always heavily used in the market, however, due to poor financial literacy, not many people paid heed to it and now can be seen doing a lot of research using digital tools. This is one step that they are taking towards the bigger pool of knowledge,” says Bajaj.

He rightly points out that financial planning is crucial to successful adulting, and the sooner youngsters start learning the finance market and the way it works, the better. “Having these skills under the belt will definitely prove to be an asset, however it is not easy, practice will make one perfect,” he adds.

Growing awareness

When it comes to finance, you must have a structured thought process. It will not only help you grow your savings but also let you protect it.

“The market has been penetrated with so many products that are being promoted in an aggressive way. There are times when people with little knowledge of the product might even buy it,” he says.

Bajaj further adds that the way financial products are pushed to people, they need to understand and be able to tell the difference between a right and a wrong investment. “Many a time, people go with their instinct and their personal experiences, however, more than that the focus needs to be on understanding the concept of finance which is possible only if you learn,” he says.

He points out that through the years he has seen a positive thing though — people in the age group of 25 to 35 have started showing a lot of interest in knowing financial tools and an eagerness to gain practical education.

Use multimedia

The founder says that the youth is a critical demographic for any nation. “However, when it comes to millennials, they are open to learning new things. That said, their approach is beyond the classroom setting,” says Bajaj.

He points out that this generation takes in a lot of content that is being generated online. “When it comes to learning, an element of entertainment helps and keeps them interested, so multimedia — videos, images, podcasts and interactive material drives any industry, hence it is important to incorporate all this into finance,” he says.

He strongly believes that with these tools they can not only assess investments, savings and risks but understand real inflation, sources of income and so on.

To help people understand both the technical and practical benefits and usage of financial tools, Elearnmarkets is hosting a webinar with industry experts on May 30 and 31. To know more, visit their website.

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