In this tech driven modern world, every country is getting ahead so why are we lagging behind despite of so many
accomplishments India has gained,ever wondered why?
Teens are the future of nation, this is our small initiative to boost their financial managemnent skills
Financial education and effective money management skills can help to strengthen the financial skills.
Empowerment and Independence:
Financial Lietracy: When people understand basic financial concepts, they gain the knowledge and
confidence to make informed decisions. This empowerment leads to greater independence in managing their money
Budgetinng: Learning how to create and stick to a budget allows individuals to take control of their
spending, prioritize expenses, and allocate funds wisely.
Avoiding Debt Traps
Debt Management: Financial education teaches strategies for managing debt effectively. Understanding
interest rates, credit cards, and loans helps prevent falling into debt traps.
Money management skills
Investment and Wealth Building:
Investement Knowledge:Financial literacy enables people to explore investment options (stocks, bonds,
real estate, etc.). Investing wisely can lead to wealth accumulation over time.
Compound Interest:
Understanding the power of compound interest encourages consistent saving and long-term investment planning.
Retirement Savings:Financial education emphasizes the importance of saving for retirement early in life.
Proper planning ensures a comfortable retirement.
Risk Management:
Reducing Stress: Financial stress impacts mental and physical health. Education equips people with coping
mechanisms and strategies to alleviate stress.
Financial Goals:Setting clear financial goals (buying a home, education, travel) motivates disciplined
saving and spending.
Avoiding Scams and Fraud:Financial lietracy not only strengthen your finances knowledge but also bring
awareness to fall into cyber crimes.
Consumer Protection: Financial literacy includes awareness of common scams, identity theft, and
fraudulent schemes. Educated individuals are less likely to fall victim to such traps.
According to a survey by the National Centre for Financial Education (NCFE) in 2019, only 27% of Indians
teens are financially literate , which is the lowest among BRICS nations.
Another survey conducted by Streak found that only 16.7% of Indian teenagers are
financially literate (lowest among conutries like USA,UK,Singapore).
Challenges Faced by Teens Regarding Financial Literacy :
-Lack of formal education on finances and its management topics in schools.
-Insufficient awareness about basic concepts such as debit,credit, revenue, net-worth, loans,investement
startegies.
Stock Market Overview
The stock market is like a bustling marketplace where people buy and sell shares of companies.The stock
market is where companies list their shares for public trading.
When you buy a share, you become a partial owner of that company.
Basic concepts:
Stocks (Shares):- Represent ownership in a company. When the company does well, your shares gain value.Bonds:- Loans to companies or governments. You earn interest over time.
Indexes:
Groups of stocks that represent the overall market (e.g., S&P 500).
A mutual fund is an investment platform that pools money from several investors and invests these funds in various financial securities such as bonds, stocks, shares, money market instruments, and even gold.
These funds are managed by investment professionals who allocate the pooled money to generate revenue or capital gains for the investors.
Individual investors, including teens, have access to professionally managed portfolios of stocks, bonds, and other securities through mutual funds.
Each shareholder participates evenly in the fund’s profit or loss.
Investing in Mutual Funds:
Key aspects:
KYC (Know Your Customer):
Understand why it’s required for investing in mutual funds.
SIP (Systematic Investment Plan):
Learn about investing through SIP, which allows automated monthly investments.
Understand the importance of saving. Set specific goals, whether it’s building an emergency fund or saving for a vacation.In the social media infulenced era, knowing what`s essential and what`s not can save you from practising false money management skills.
Break down your goals into smaller steps. For instance, if you want a $1,000 vacation in a year, set aside around $83 per month to achieve it.
Start Investing Early:
Don’t wait to invest. Even as a teen, consider learning about investing.
Compound interest works wonders over time. The earlier you start, the more your money can grow.
Avoid living paycheck to paycheck. Instead, aim to spend less than what you earn.
Distinguishing between needs and wants is crucial.
Needs include essentials like food, housing, transportation, and health insurance. Wants, on the other hand, are desires such as new clothes or exotic vacations.
