Do you want to be rich or do you want to achieve all your financial goals? But you think, oh, I'm just a middle class person. I earn so little. It's not possible for me. So I must tell you, my friend, you are wrong. You can be rich too. The problem is just that you are unaware that one must learn to be rich. Let me tell you that secret. If you don't know, that means even if you are a postgraduate or doctorate by qualification, you are financially illiterate. Yes. And you are to be blamed for not reaching out to this level of literacy. A report cited SEBI as saying that only 27% of Indians are financially literate. The National Center of Financial Education report showed that over 73% of our adult population fail to understand basic financial concepts. So today I shall share what financial literacy is and how it can help you to be financially sound. So please bring in your pen and paper and note down all the knowledge. Until then, I shall wait for you. First of all, let's understand what financial literacy is. It is the ability to understand and effectively use financial skills, including personal financial management, budgeting, and investing. When you are financially literate, you have the foundation of a relationship with money and is a lifelong journey of learning. The earlier you start, the better off you will be, because education is the key to success when it comes to money. Although many skills might fall under the umbrella of financial literacy, popular examples include household budgeting, learning how to manage and pay off debts, and evaluating the different credit and investment products. Now these skills often require at least a working knowledge of key financial concepts which need to be learned. Other products such as mortgages, student loans, health insurance, and self-directed investment accounts have also grown in importance. Now this has made it even more imperative for individuals to understand how to use them responsibly. Financial literacy can cover short-term financial strategy as well as long-term, and which strategy you take will depend on several factors such as your age, time horizon, and risk tolerance. This also includes knowing which investment vehicles are best to use when saving, whether for a financial goal like buying a home or for retirement. This is not to add the novelties in finance such as e-wallets, digital money, buy now, pay later, and other new financial products that can be convenient and cost-effective, but require potential consumers to be educated to assess them adequately to their advantage. Holistically, the benefit of financial literacy is to empower individuals to make smarter decisions. More specifically, financial literacy is important for a number of reasons, like it can prevent devastating mistakes, because it helps individuals avoid making mistakes with their personal finances. It can prepare people for emergencies, because like losing a job or having a major unexpected expense are always financially impactful, and an individual can cushion the blow by implementing their financial literacy in advance by being ready for emergencies. Then it can help individuals reach their goals because by better understanding how to budget and save money, individuals can create plans that set expectations, hold them accountable to their finances, and set a course for achieving seemingly unachievable goals. Then of course, financial literacy invokes confidence, and by being armed with the appropriate knowledge about finances, individuals can approach major life choices with greater confidence, realizing that they are less likely to be surprised or negatively impacted by unforeseen outcomes. Now developing financial literacy to improve your personal finances involves learning and practicing a variety of skills related to budgeting, managing and paying of debts, and of course understanding credit and investment products. The good news is that no matter where you are in life and financially, it's never too late to start practicing good financial habits. And as we say, sooner the better. So at whatever age you are, just start. And here are several practical strategies to consider. Like create a budget, track how much money you receive each month against how much you spend it. Your budget should include income from all sources, fixed expenses, discretionary spending like non-essential, eating out, shopping, travel, and of course, most important, savings. Then pay yourself first. Now to build savings, this reverse budgeting strategy involves choosing a saving goal, such as paying for higher education, deciding how much you want to contribute towards it each month, and setting that amount aside and then think of the rest of your expenses. Then pay your bills promptly. Stay on top of monthly bills, making sure that payments consistently arrive on time. Consider taking advantage of automatic debits from a checking account or bill pay apps and sign up for payment reminders. Then get your credit route. Yes, credit report is very very important because it and take it like once a year because consumers can request a free credit report from the three major credit bureaus Equifax, Experian, and TransUnion. Now review these reports and consider spacing out your requests throughout the year to monitor yourself regularly. Then check your credit score. Having a good credit score helps you obtain the best interest rates on loans and credit cards, among other benefits. In addition, be aware of the financial decisions that can raise or lower your score, such as credit inquiries and credit utilization ratios, etc. Then manage debt. Use your budget to stay on top of debt by reducing spending and increasing repayment. Develop a debt reduction plan such as paying down the loan with the highest interest rate first. Now if your debt is excessive, contact lenders to renegotiate repayment, to consolidate loans, or find a debt counseling program. Then lastly, invest in your future. And if you don't know how, seek financial advice from professional advisors to help you determine how much money you'll need to retire comfortably and develop strategies to reach your goal. Now let me give you a hack. The two commonly used personal budgeting methods, they are known as 50 2030 and 702010 rules. And the simplicity is what makes them popular. The former one that is 50-2030 means needs 50%, savings 20%, and wants 30%. Now that is your income after paying your tax. And the second one, that is 70-2010, it also follows a similar blueprint recommending that your after-tax take home income be divided into once again three segments: expenses 70%, savings 20 and 20%, and investments 10%. Right? So the bottom line is that financial literacy is the knowledge of how to make smart decisions with money. Now this includes preparing a budget, knowing how much to save, deciding favorable loan terms, understanding impacts to credit, and distinguishing different vehicles used for retirement. Now these skills help individuals make smarter decisions and act more responsibly with their personal finances. A strong foundation of financial literacy can help support various life goals such as saving for education or retirement, using debt responsibility, and running a business. So I hope you find this podcast useful. If yes, please subscribe to this podcast on Apple, Spotify, and Google Podcast to get notified. All my podcasts are around 10 to 15 minutes, so they are short and crisp. You can also subscribe to my YouTube channel, Brainiacs EduTech. Now there I do podcasts in Hindi. So if you are interested in that, please watch out. I request all of you to please write, comment, and give feedback. This also helps in the learnings and we get to prepare content that is more required by our viewers and listeners. So if you have any queries, you can also DM me on my Instagram channel, BBC. And you can also join my community, Career Advisor Hub on Facebook, and be a part of discussion QA. Lastly, if anyone is very querying and wishes to be part of my podcast, and that is the answer. And I shall invite you to my podcast. Until the next episode, cheers, god bless, keep inspiring.