Financial education is very important for youth

You need a regular income for everyday needs. This can be achieved only through your savings and investments.

Covid-19 has disturbed the lives of crores of people of the world. Countless people were financially ruined. Coronavirus has given us a lot of education, one of them is learning to be financially prepared. Being financially literate has become very important in today's era. To understand this first, we have to pay attention to some statistics.

According to a survey conducted by Standard & Poor's, 76 percent of Indians do not understand basic economics. The educated section using financial services is still financially literate, but there are still millions of people who are unaware of the changing financial landscape.

Financial literacy is concerned with understanding various financial concepts and capabilities and services. These include personal finance, budgeting and investing, etc. As governments of different countries are increasing financial services, the number of bank accounts and credit products is increasing.

There is a price to be paid for achieving financial literacy. Those who do not understand the rising interest, they have to pay more loans. Loans are very expensive for them. Together they have to take more loans and then their savings get reduced.

Importance of saving in youth:-

Suppose you are 25 years old and every month you save 5 thousand rupees in a bank account, on which you get 8 percent annual interest. Do you know how much money you will have at 40? In 15 years you will deposit Rs 9.05 lakh and you will get Rs 17.58 lakh.

If you start saving this much from the age of 20, you will get a total of Rs 29.89 lakh on a deposit of Rs 12.05 lakh. With this, you can understand how much it is beneficial to start saving at a young age.

Why you should save?

Achieving goals:– 

We save to meet our short-term and long-term needs. These include spending holidays, getting a car, building a house, educating children, etc.

Emergency:-

We also need money to deal with emergency situations. These include job loss or medical expenses etc.

Retirement:–

​If you are going to retire then you need a regular income for everyday needs. This can be achieved only through your savings and investments.

Manage money:-

Prepare a budget: 

Keep an account of your expenditure, prepare a budget for this. This will help you plan and make sure that you do not spend more than a certain limit.

Keep an emergency fund:

If your income is 30 thousand rupees and there is a regular expenditure of 15 thousand rupees, then you should have an emergency fund of 60 thousand to 1 lakh rupees.

Set Financial Goals:

Set financial goals for yourself. It is very important to understand what you want to achieve with your money. Without this, your financial management doesn't matter.

Avoid Debt:

Don't take a loan when you don't need it. It is easy to take a loan, but it is difficult to repay it. Regular income is necessary to repay the loan. Also, you have to pay interest.

Be financially literate:

Don't invest money on investments you don't understand. Be more and more knowledgeable about investing. Keep learning new things with time.

Invest, invest money on multiple products: 

The longer you invest for the longer term, the more you will earn. Avoid investing all your money on a single investment product, such as stocks. Broaden your portfolio.

The power of financial literacy:

Robert Kiyosaki, the founder of Rich Dad Company, says, “Along with academic education, financial education is also very important. Both are important, but in schools, one is left out.”

Keep the above:-

Mentioned things in mind and be financially savvy. It has many benefits. Those who have financial knowledge are able to save better and prepare for good retirement planning. Investing from a young age can overcome many financial difficulties in life.