Why Financial Literacy is Important?

Last Updated on November 4, 2023 by BFSLTeam BFSLTeam

While the overall Indian population is embracing the digital age with great enthusiasm, and both men and women are more savvy in this sphere than ever before, there is a distinct lack of financial literacy in Indian women. Of course, women in India are more educated and liberated than they were in previous times, but many lack the financial acumen required for making effective investment decisions and planning their financial future. What women in India must understand is that financial literacy arms them with the means to make independent decisions in a largely patriarchal society. 

Why Indian Women May Lack Financial Literacy?

India, till recent times, has been a largely patriarch-focused country. Typically, in any average Indian family, you will find that the male spouse works while the woman is a housewife. Some women are not qualified enough to work and lack an appropriate education, while others, even though educated, are not employed. This may stem from a long history of patriarchy in the Indian social ecosystem or may be due to circumstances like parents arranging marriages and women having children and raising them.

While women may embrace the digital economy, the world is embracing gender equality and trying to eliminate ideas of female stereotypes in the home and the workplace. India still has a long way to go but is on the way to being more gender-equal. In light of this, women must take their own stand about being financially literate so they can boost their confidence in making financial decisions in the family. 

The Advantages of Financial Literacy

Financial literacy aids in breaking the barriers that curb women from success. India is, presently, the third-largest economy on the global front. While India is an economic powerhouse, the awareness about money and finance in India’s women is sorely lacking. Although the number of women gaining an education is catching up with men, the number of financially literate women compared to men is far behind. 

If India wants to reach the next level of prosperity and growth, it is very important that women take finances head-on and educate themselves. In many cases, women are indifferent to financial matters, but this is the age of the modern Indian woman, and while success is seen in fields like education, business, sports, politics, and entertainment, to name a few, there isn’t much seen in financial areas. Here are some advantages of financial literacy for women:

• Financial literacy empowers women to be economically independent.
• Financial literacy arms women with information to make key financial and investment decisions. 
• Financial literacy inspires women to be more educated in money matters and to be more confident in general.
• Financially literate women have the confidence to cope with realistic economic issues like inflation. 
• Financially literate women can pass on their knowledge to their children and imbibe monetary literacy at an early age. 
• Financial literacy can help women manage their home budgets in an effective manner, letting them know how to run their homes economically. 
• Financial literacy results in financial responsibility and women can become financially independent and help to overcome emergencies. 
• Financially independent women have the monetary support to lead their lives successfully even after the demise of a spouse. 

Ways to Improve Financial Literacy

If you think you lack financial literacy, there are several ways you can employ to educate yourself about finances: 

• Subscribe to newsletters on finance.
• Read books on personal finance.
• Use social media to educate yourself about finance and investments.
• Maintain a household budget and make a list of needs that you have to make expenses on. 
• Read about topics on finance and try to get the basics clear first. You can read newspapers like the Economic Times, the Mint, the Wall Street Journal, and many online news articles. 
• View financial literacy tutorials on channels like YouTube, etc. You can also visit financial and investment websites to learn about finances. 
• Learn about simple banking processes like KYC, how to open accounts, how to make particular investments, and what they are.  
• Attempt to invest your capital, even in a small amount to learn how your wealth grows and how you earn interest and make gains. 

Be Familiar with Finances

You may read any amount of books and stream websites and videos to learn about finances and achieve financial literacy. However, there is nothing quite like your own experience and the best place to start to be financially literate is increasing familiarity with your own finances. Financial literacy is dependent on great financial knowledge, but it is also the result of discipline in finances and sound financial planning and habits. You should first learn about how to make a budget, manage your debts, and make plans for your future, say, your retirement. 

You must be aware of basic financial principles and if you are not actively taking part in your family’s personal financial decisions, it is never too late to start and take some control.