Financial literacy

There are people in the world who are having high income but are still living petty lives as they don’t know how to manage their finances.

Can you be financially secure even if you are not making a lot of money?

Can ordinary people invest in the stock market with manageable risks?

Answers to these questions are YES if you are well versed with Financial literacy.

Today managing money in a beneficial way has become a skill. It all starts with the income or money you are making in present. It can be through your salary or investments.


Your first step towards becoming a financial literate is to have enough money to manage. How can you make money now? For making money, you have to create your own value in the market. Employers would never hire YOU but they will hire your SKILLS. When you are imparting skills in yourself then you are creating your value. The more and better skills you have the more the value you would have.


When you get your income then what is the first thing you do?

Of course you either save it or spend it. In most of the times, you spend your income first. Now, how, when and on what to spend your income are the important aspects of financial literacy. Do you even know where your all money goes?

There is a 50:30:20 rule where 50% of your income goes to your urgent costs that can’t be delayed for example monthly bills including housing or rent other 30% of your income goes to Debt or savings and the rest 20% goes to your entertainment or the things you like to do or buy. If you don’t manage your expenses carefully then the repercussions only contain the regrets. People should note down their financial priorities every month then spend the income accordingly.


Assets are the things on which you have the ownership. Everything from your house and saving accounts to your car are regarded as your assets. It is advised to develop the habit of saving from as earlier as possible while earning. Even if you save a very little amount then also this is not the problem. The thing is you should save and get into the practice of saving. Save regularly for any upcoming unexpected expenditures. Save as much to build more and more assets. After saving, make a diverse financial plan through which you can efficiently use your income.


Investment nowadays has become  a necessity. Your one portion of your income ought to be used to buy a stock as to open multiple ways to earn money. There is always some amount of risk while buying a stock as the company in which you are investing may get profits in future or maybe not. So, you have to choose the company wisely in which you are investing. For a beginner, it is advised to invest in index funds or mutual funds. A mutual fund is a professionally managed portfolio for investment  that pulls money from all sorts of investors especially for those who are looking for diversifying their investments. Index funds are which are able to manage the performance for a group of companies like a group of tech companies or group of consumer goods company etc. An index basically consists of a basket of companies related to a particular niche. There are a lot of indices out there which can grab your attention. There comes the role of financial literacy which helps you to understand the tools required for achieving the short- term goals, intermediate goals or long-term goals.


Liability is basically the debt you owe to  a person or a business. Buying something with credit that is an asset and consuming something with credit has a vast difference. Using your student loan to go for a trip or investing your student loan to build assets and to hone your skills create a big impact in your life. Whether you use your money to invest on yourself or spend it on having fun, it all depends on you and your mindset. The worse repercussions of more debt than your income have all been emotional. They suck all the joy of one’s life. Try to limit your expenses and liabilities. In the end, it all depends on you whether you make right choices or wrong. These choices can be related to money , education and relationships etc. Every choice you make has an impact in your life. It does not matter whether the impact is large or small. So, choose wisely!