User talk:Dr. Adil Naik

Financial Education
What is Financial Literacy.

Financial literacy is an education and understanding of knowing how money is made, spent and saved as well as the skill and ability to use financial resources to make decisions. These decisions include how to generate, invest, spent and save money. The concept of financial literacy is applicable to both individual and organization. Individual must be able to balance a check book, comprehend personal income tax and understand the concept of budgeting in order to make wise decisions with money. Financial literacy is characterized as a sequence of financial awareness, knowledge, skills, attitudes, and behaviours that enable people to make wise financial decisions and, as a result, attain financial well-being (OECD, 2012).

''What Does It Mean to Have a Financial Education?

According to a 2015 report by the Consumer Financial Protection Bureau, the purpose of financial literacy is to develop a sense of control over your finances while also using money as a tool to make freely made decisions that lead to increased life happiness (CFPB). Other objectives include the ability to deal with unforeseen circumstances such as job loss and the ability to define and achieve financial goals. When you're financially literate, you know how to allocate your income to a variety of objectives at the same time—not just ongoing expenses, but also savings, debt repayment, and an emergency fund. You have the resources you need to thoroughly investigate and assess loan, credit card, and investment options. Even if you don't have a lot of extra cash to assist you achieve all of your financial goals, financial literacy will help you prioritise them and make progress when you can. Financial literacy in action can look like: -Every time you get a raise, increase your retirement savings rate. -Keeping an emergency fund with three to six months' worth of expenses and replenishing it after you've taken money out of the account. -Taking a look at balance transfer credit card promotional periods to see if you can get a longer period to pay off your debt. -Keeping track of your credit report on a frequent basis.''

Why Is Financial Literacy Important?

Consumers who are financially literate not only handle their money more confidently, but they also have a better chance of dealing with the inevitable ups and downs of their financial lives by knowing how to avoid and manage problems as they come. That could involve keeping a close eye on their bank and credit card accounts so they can spot any potential fraud as soon as possible, or being able to rapidly recover from a costly unexpected automobile repair thanks to a large cash reserve. Financial literacy, on the other hand, can assist consumers in diligently saving for things that are important to them, such as a vacation or their child's college education. Here are the ways financial literacy can affect your life: ·       Understand how much you earn and spend: Know how much you make and how much you spend: Making a budget is a crucial part of developing financial literacy since it allows you to gain a true picture of your income and expenses. Once you've created a budget, you can keep track of your spending and examine it on a regular basis. Choose one of the various budgeting approaches available, such as zero-based or 50/30/20 programmes that you're most likely to stick to. ·       Repay and avoid debt: When comparing loan conditions, looking for the lowest interest rates can save a lot of money over time, as can paying off credit card balances each month to avoid interest costs. If you currently have debt, financial literacy can assist you in determining the best techniques for getting out of debt, whether on your own or with the assistance of a reputable expert such as a non-profit credit counsellor. ·       Protect yourself from debt and bankruptcy: Creating an emergency savings account is a critical step in avoiding debt accumulation. A financially savvy saver understands how much money to save aside—ideally three to six months' worth of expenses—and strives to maintain that amount at all times. ·       Work toward a secure retirement: Save for retirement at the same time as you save for other short-term goals. You'll have a better sense of how much to save, what type of retirement you want, and how to get there once you've become financially educated.

For more kknowledge: https://smartmoneysavy.com/ Dr. Adil Naik (talk) 12:36, 15 February 2024 (UTC)