FINANCIAL LITERACY BYB Dr GANESH MERGU.pptx

financial literacy notes

1. FINANCIAL LITERACY

2. Financial freedom is the state of having sufficient income, savings and investments to live your desired lifestyle without being dependent on a traditional job or facing financial stress, manage emergencies, pursue your goals, and make choices based on your desires rather than monetary constraints

3. WHY DO WE NEED MONEY We need money to live (Survival) We need money to grow We need money to help others We need money to live harmoniously with others We need money for the future

4. WHAT IS FINANCIAL LITERACY Financial literacy is the ability to understand how money works, how someone makes, manages and invests, and also expends it. Financial literacy is the knowledge of budgeting, saving and investing, enabling individuals to make informed decisions about their personal finances How to become financially stable and independent Financial literacy is the possession of skills, knowledge, and behaviors that allow an individual to make informed decisions regarding money

5. WE NEED TO BE FINANCIALLY LITERATE SO THAT We know how to manage our finances We control the use of money We can increase our savings for financial stability We will know how and where to invest

6. WHY WE WILL HAVE MONEY PROBLEM No work, No income, No money We lack knowledge on how to manage our money and finances, if we have money we simply spend it and more often we don’t know what we need for tomorrow. We don’t know how to invest Money problem can be a root of all other issues, Domestic concerns and problems within the family

7. THERE ARE (5) FIVE PRINCIPLES OF FINANCIAL LITERACY : Earning Calculate Income Always underestimate income Deposit a lump sum and withdraw monthly pay Saving and investing Borrowing and managing your debt Spending and planning Protecting your assets

8. FINANCIAL PLANNING PROCESS

9. SAVINGS Dedicated saving (saving to spend) Power of Compounding Saving Options PPF NSC Sukhanya Samruddi Yojana NPS Post Office Savings Recurring Deposits Fixed Deposits ULIPs,

10. INVESTMENT/FINANCIAL LITERACY/DISCIPLINE “ The best investment you can make is an investment in yourself... The more you learn, the more you’ll earn.”  — Warren Buffett It equips you with the knowledge to make informed decisions, leading to greater monetary stability, less stress, and a higher quality of life. Financial literacy empowers you to take control of your finances and navigate the challenges and opportunities that arise. It is a crucial element in achieving financial health.

11. ELEMENTS OF INVESTMENT

12. INVESTMENT

13. BUDGET Word “budget” is tantamount to the word “diet”, but as it most basic, a budget is just a spending plan Step 1: Calculating Income Step 2: Calculating Expenses Benefits: maximize assets & minimize debt

14. WHAT DO WE DO THEN Income minus savings equals expenses We need to empower ourselves financially Identify what the Needs and Wants are “Need” something you have to have “Want” something you would like to have Rationalise spending Use money for wealth creation INCOME – SAVINGS = EXPENSES

15. Continuation… 5. Get out of debt 6. Spend wisely (spend less and buy only what you need) Don’t compare yourself with others Don’t compete with your peers and neighbours Prudent Use of Money 7. Thriftiness and diligence Work hard and save, don’t wait for grants

16. 9. Do consider running your business as a part-time operation alongside your current job. This is a great model because you will continue to have income and benefits

17. 10. Identification of Essentials

18. Budget Analysis Tracking Expenses, Basics -Determine where the money goes Goal: get your money to last longer Methods: Keep receipts Balancing a chequebook Notebook or ledger Calendar Software or websites Envelops with Money

19. Control Measurements Get a loan only if you need to Diversify investment Making your own cash flow Start personal savings programs and discipline (money saved is money earned) Acquire financing or loans to start or expand a business and for wealth creation (It takes money to make money)

20. Continuation … Save 20% of your earnings One can’t be rich overnight Control your expenditure Stop betting on number games and gambling Avoid impulse buying

21. Continuation… Make your money multiple and guard it at the same time from loss Own a house and lot Make your productive lot Ensure future Income Have a retirement plan Invest in co-ops, real estate etc..

22. Continuation… Slowly build up your share capital Don’t spend more than you earn Invest in various forms Sell unwanted, idle and not used properties Safeguard your growing fortune and buy yourself insurance Don’t speculate in get-rich-quick schemes Invest in a solid, long-term business

23. Conclusion/Outcome/Financial Freedom Help reduce college debt and the stress that comes with it. Help develop good saving habits. Allow more generated wealth to help with future expenses. Help develop knowledge relating to debit and credit cards. Learn the value of investments, Such as stocks, bonds, and ETFs

24. Philosophical View of Money A fundamental point of the Philosophy of Money is that money brings about personal freedom. The effect of freedom can be appreciated by considering the evolution of economic obligations. Essentially, everything in the karma philosophy comes down to this: what you put into life is what you get out of it . Money movements like "Think and Grow Rich" illustrate the karma