Is financial literacy important?

Let me start with asking few questions. The below table consist of 2 columns. Each column has a set of questions, you must answer each question with answer of either “Yes” or “No”. Read the question and see if you can answer it or not. I do not need the answer - I just need to know if you know the answer or not. Confused? Let me clarify – Say the question is “Who won the Bengal election?” If you know the answer, then say “Yes” otherwise “No”. Similarly do that for the below set of questions. Give yourself 1 point if the answer is “Yes” and 0 for “No”. And then sum it up separately for both the columns.

Column A	Column B
Can you recommend me the best app among these: Instagram, Snapchat or TikTok?	What is compound interest? Does it affect us?
Who won the last cricket world cup?	Why do we pay taxes? Can we avoid it?
Which place creates the best cake or the best pizza?	If I give Rs.1000 can you earn 200 by using it within a week?
Where to buy clothes from? Amazon, Flipkart or Myntra?	Can you save money in today’s age of inflation and high expenses?
Can you listen to 5 songs in 20 minutes?	Why does credit card charges interest amount?
Do you have notes for next exam?	What is inflation? How to prepare for that?
Do you have a job? Or do you own a business?	Where would you keep your money for it to grow? Bank? House? or someplace else?

Once you have the points summed up, compare which column did you get the maximum points. If total points in column A is more than column B, then you’re in for the ride. Then this write up of mine is of significance to you – do not stop, continue reading. If you get more points from column B, then too continue reading and let me know if I make sense.

Knowing answers to questions from column A is good for general knowledge but not beyond that. But knowing what is being asked in column B directly affects us. You may not know but if you have answers to questions from column B, then you are sorted with money matters of this life. And you would be called financially literate.

What does It mean to be Financially Literate?

Before I answer that let me tell you what finance is: The money for any project or a business is called finance. Finance is also the activity of managing the money. Taxes, insurance, loans, budgets, banking, credit cards, expenses, savings are all part finance.

Financial literacy is the union of financial, credit, and debt management knowledge that is necessary to make financially responsible decisions or choices that are integral to our everyday lives. Financial literacy includes the skill to understand what using a credit card really means, where to invest, and how to avoid debt. It also gives you answers to questions asked in column B. Financial literacy has a direct impact on us as we try to balance our budget, buy a home, fund our children’s education, and ensure an income for retirement.

The absence of above-mentioned understanding is referred to as being financially illiterate. According to an accredited financial literacy survey, traditionally, India hovers at around 24% in financial literacy rates, which compared to 55 per cent in developed countries, is woefully insufficient. This means nearly 76% of Indian adult population does not understand even the basic financial concepts. This reveals the pressing need to educate the masses about finance. Financial illiteracy puts a burden on the nation in the form of higher cost of financial security and lesser prosperity.

Despite having the world's 10th largest and Asia's oldest stock exchange, low per capita income, education inequality, non-banking habits and informal borrowing and lending, ruled the country for years. Thus, it is imperative for the country to now optimize its resources and boost the economic and financial backbone of the nation. India’s financially literacy rate, albeit abysmal it’s increasing. Not long it was around 15% and now it 24%. Recent reforms like push for bank accounts, digital payments, increase usage of mobiles for payments is significant, as India is already the world’s second biggest smartphone market with over 220 million smartphone users. There are enormous possibilities to go digital and create new opportunities to engage and share financial knowledge with consumers.

How important it is be Financially Literate?

Financial literacy is important because it prepares one with the knowledge and skill to manage money effectively. Without financial literacy, the actions and decisions one make or do not make with respect to savings and investments would lack a strong foundation. Financial literacy helps in understanding financial concepts better and enables one to manage their finances efficiently. It also enables an individual to prepare for future, create himself or herself with enough wealth for his or her retirement.

It is important to inculcate financial awareness at an early age as that would benefit the people in planning their investment properly at a later age. The introduction of financial education at an early level will also help the students to identify whether to narrow down to the same career in future or not. As currently, they are able to take this decision only when they are undergoing graduation.

How would you benefit if you are Financially Literate?

Managing bills: Bills for electricity and such, loans, rent can easily be managed

Savings and expenses: What you earn should be divided into two parts: savings and expenses. Education in finance can help you know how to divide it better

Building wealth: One should be wealthy and not rich. Money with education makes one wealthy

Protecting oneself in case of emergencies: A sound knowledge in finance can be helpful in creating an emergency fund

Achieving goals: Without financial education one mostly lives life from paycheck to paycheck with no goals and ambitions to aspire

Retirement planning: How to save, where to invest – knowing answers to these questions will help one to prepare for their retirement

Lead a tension free life: Being financially literate will also help you stop stressing on your expenses

How to Become Financially Literate

There is no dearth of knowledge in today’s digital age. One only needs to do a simple search in Google or in YouTube to get multiple responses to a single query. I am listing down links to few videos which I hope will be helpful to the seekers of financial wisdom.

Financial literacy for all - https://www.youtube.com/watch?v=pWU3DYvnP0s

Investing in your 20s simplified - https://www.youtube.com/watch?v=qsCUE7kzFHA&t=2s

3 money management tips - https://www.youtube.com/watch?v=TITs-R1BM-M

Best money management tips - https://www.youtube.com/watch?v=uYNfT6B2Hqg

Best personal finance strategies - https://www.youtube.com/watch?v=nbrkmJTuGoY

Source for the writeup - The facts and figures are taken from the following sources:

https://www.livemint.com/Opinion/f5xo11OSPqxGWUdaWKVb8J/Why-India-needs-to-work-on-financial-literacy-now-more-than.html

https://timesofindia.indiatimes.com/home/education/news/why-encouraging-literacy-in-finance-matters/articleshow/78060694.cms

https://www.investopedia.com/articles/investing/100615/why-financial-literacy-and-education-so-important.asp

6 things to learn from Eva and her love of books

Recently I finished a book called "The book of lost names" by Kristin Harmel. The story is a beautiful tale of love, integrity and hope from one of the most gruesome war of human history. Eva, the protagonist starts forging documents for identification for Jewish in order to save them from the cruelty of German Nazis. As the story unfolds how Eva did what she did to save the people and the support she received from well intended people; we also get to know the love she has for books in general. Here are few excerpts copied from the book which I have noted down for myself and something I totally align myself with. I want to keep coming back to these quotes and remember how wonderful book lovers/readers are.

1. The protagonist (Eva) thinking about her father

"He had taught her to love reading, one of the greatest gifts a parent could give a child, and in doing so, he had opened the world to her."

2. Eva while visiting a bookstore and meeting its owner

"Eva refused to believe that a person who had made a life from books could have evil in her heart."

3. Eva while visiting the church's library for the first time

"Books, wherever they were in the world, always felt like home to her."

4. The church's priest talking about the what bookstore's owner felt about Eva

"When she came to see me, she said that anyone who saw the magic in books had to be good.”

5. Old Eva while waiting for her flight and watching a preschooler engrossed in a coloring book

"I’ve always thought that it’s those children—the ones who realize that books are magic—who will have the brightest lives." 

6. Old Eva while visiting the library in modern day Germany

"Once you’ve fallen in love with books, their presence can make you feel at home anywhere, even in places where you shouldn’t belong."

Get yourself noticed

A few days ago I was reading a book called "Show your work" by Austin Kleon . And like it always happen, I was trying to relate it to my past experience. First thing first, the book is a wonderful source through which the author conveys his action plan to get oneself noticed. The simple yet profound insights which also includes his creative images, anecdotes and examples will surely leave impact on reader's mind. The book is definitive step by step tool to showcase ones creative talent.

Now, coming back to the experience which I was reminded of while reading the book. I was on my way to Asansol (a city in West Bengal, India), where we stopped midway at a place called Shaktigarh for meals. The place beside the highways is crowded by sweetmeat shops, coconut water, chaats (an Indian street savoury snack which is a mixture of sweet curd, puffed rice, boiled potato, etc.). Among everything else I was attracted mostly to a man who had decorated his stall in such a beautiful manner that one could not take eyes off him. I was astonished to see the process and efforts he had applied for him to get noticed. I quickly got my phone out and took his photo. 

Here’s how we are trying to help during the COVID-19 pandemic

Our country is navigating through a worst kind of pandemic. The current situation is not unknown to us. While few run around the city to get a life support for shortness of breath, few others are on phone searching through their contacts to get beds and oxygen for their dear ones.

A few days ago, couple of us were on phone to find a bed for a relative whose oxygen saturation was way below a normal range. We tried calling any and many hospitals in Kolkata – called for more than 5 hours without getting any positive response. Most of the time the numbers shared on social media were un-reachable. The difficulty was clearly visible, it wasn’t a horror story from children books anymore. We could imagine the pain faced by so many people across the city and country as a whole.

A group of friends got together and decided we would go through all the contacts that are circulating in the social media, and call them one by one and see which one are genuine. We would only keep them and circulate those among the needy ones. And hence this idea gave birth to https://cov-aid.github.io/resource/ - a portal where contacts for oxygen, beds, hospitals and vaccines are updated real time (by a bunch of volunteers). We call the source every day and update the information based on their response.

This portal provides information for Kolkata only as of now. For pan India, this site should be useful https://indiacovidresources.in/ (Please do note that most information available on the website is vetted by third parties. So you might have to do some due diligence before transacting with these suppliers)

We hope our sincere efforts are of use to the families in need and we also pray that our efforts are rewarded hereafter.

If you want to contribute as a volunteer, then please fill up this form – Google Form

 

Learnings from Coronavirus outbreak

Sitting on my swing chair I was wondering how many days have passed since the lockdown. I started to calculate and it was 46 days ago when my country, India decided to go under complete lockdown. I am under self-isolation a week earlier to that. Unless you are living under a rock, I hope you are able to understand what I am speaking about here. Yes, it is the coronavirus pandemic that has brought a halt to many of our lives and changed our lives completely, giving several degrees of turn to it.

I was still on my swing chair and my train of thoughts were on a ride, pondering on many questions. Questions like – ‘when will this end?’, ‘will our lives be different then?’ and ‘what learnings do we take from this part of our life to the other part?’ Among such questions, one rose above the other. It seemed to me that in my tracks of thoughts there was this question taller than others and raising its hand high up in the air, higher than the others. I had to but notice it. It asked – ‘Did isolation benefit anyone?’ Well, to be honest I have had read about people like Martin Luther King Jr., Nelson Mandela and Ibn Taymiyyah (ra) writing while they were in prison. Our current situation is not exactly like prison, but we are confined to the 4 walls of our homes, stepping out unless completely necessary is prohibited, we have to maintain physical distances with one another – hence there are similarities. So, I thought to myself, “Why don’t I write. That will be my contribution during this lockdown.”

At the time of this writing, there have been more than 4 million people affected by coronavirus and more than 270K deaths from the COVID-19 pandemic worldwide. In India alone number of people with positive CVIOD19 disease has crossed 60K. In three short months, a novel coronavirus has captured global consciousness and changed day-to-day life in large parts of the world, in the process becoming a public health emergency. This is like no event before – not in our lifetime, neither in our father’s our grandfather’s life time. While we are coordinating with the local, national, and global response to the rapidly changing situation, we are, collectively, learning how to better tackle with this pandemic.

While there will be much to learn when (we hope) this pandemic is over, I think there are some key lessons that I have learnt that are worth highlighting while it has dominated all our conversations and sharpening our thinking.

Lesson one: Humility and gratefulness– When this crisis ends I hope and pray that we all will be humble and have a sense of gratitude. We take lot of things for granted but in reality it is not. Our jobs/business, family, the air we breathe, water we drink, food we eat, services we receive, etc. are nothing but blessings from our Almighty Allah swt. Current lockdown has made us understand that there are many who are not so privileged. We should be and act grateful

Lesson two: Going Digital - It is part of how every industry will be transformed as the pandemic hastens the digitalization of work in every sector. All those jokes on work from home that were there in the beginning of the crisis – well they are gone now, because these are new normal. We have learnt to accept the situation and have educated ourselves to work remotely. I understand not everyone in the population are blessed to do that. But necessary is the mother of the invention. People are providing services online, teachers are teaching online, doctors are prescribing online, and so on

Lesson three: Our health - We are not doing enough for our health both at individual level and at government level. This crisis has exposed lot of holes in our rather dilapidated health system. What we understand now is that the digital future cannot simply make the wealthy healthier.
Nonetheless, doctors and nurses are symbol of angel in this horror time. Our health care workers are amazing and we owe them a huge debt. Same for grocery store employees, deliverymen and women, and the many other essential workers who keep us going

Lesson four: Science matters - Denial of climate change and the safety of vaccines are examples of how science can be pushed aside when it conflicts with a political agenda. Yet science matters. This is especially clear during this specific coronavirus disease outbreak. We are eagerly waking up every day with our hopeful eyes that someone from some part of the world will announce the best news of our history that COIVD19 vaccine has been created

Lesson five: Education of the public matters - Remaining clean is a must. Who knew? Well, now we all do, and we’ll probably wash our hands a lot more frequently after this is “over.” Preventing disease in populations takes robust, responsive health systems, cities and communal spaces that are built with health in mind, economies that do not generate the poverty and income instability that feed poor health, and cooperation at the local, national, and global level in creating the conditions for health. All of this requires long-term planning, and a willingness to invest in health as a public good worthy of collective by-in. This begins with educating the public about what really matters for health. The reaction to Covid-19 has shown how much we still must do in this regard

We do not know till when we will have live with this new normal. Once this ends life won’t be the same after—and that’s okay. The coronavirus pandemic is a horrible examination, but are there some things positive that may come out of all this hardship? God willing we will conquer this virus too but I hope that doesn't take away the humility from us rather make us more humble. I hope we are better educated about our health by then and learnt to live with hope and gratefulness towards all the blessings we have.