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Quiz Society SRCC

How Much Do You Love Money And How Well Can You Handle ?



YES, you heard correctly. How much do you love money, enough to die with money in your bank? A weird question I know, I ask this because a lot of people die with a huge amount of savings in the bank? Money that they worked hard to earn, money they cut many corners to save, money they never really got to spend. Do you know how much?

18,830 crore rupees are lying unclaimed in Indian Banks, this is as of 2019.


So, whom does this money belong to?

People who have not claimed it in more than 10 years, many of them may be dead, many have no inheritors.

Why did they save so much money if there was no way they could spend it or pass it to another generation? A survey found that most people save up or build assets if they can, even in retirement, why do they do so?


For Unforeseen Cost said 40 percent of the respondents, legacy said many, some said money in the bank made them feel better, a handful of them said they were scared they may run out of money if they started spending,20 percent said they don’t want to spend money even in retirement because money once spent cannot be recovered.


Here is an unpopular question: Why earn money if you cannot spend it? What if someone told you that you can save money without being needlessly frugal?


This is INDIA; a country where at least 75 percent of the population is literate but only 24 percent of the adult is financially literate meaning- only 24 percent of Indian adults understand the fundamentals of saving, investment, debt, and budgeting. 50 percent of Indian saves 0% to 20% of their earning/salary. Then there are 18000crore plus rupees lying unclaimed in banks by saving too much and dying with the money in the bank, we are either overspending or over saving. We don’t know how to handle our money better. The answer to that lies in our school classrooms. In class 8 we are taught how to calculate cost price and selling price, we are taught how to calculate simple interest and compound interest. We know theories but not the application. We are taught calculation but not decisions in money. Today in Maharashtra only 17 % of the population is financially literate,32% in Delhi, 21% in West Bengal, then we have Chhattisgarh, Assam, Arunachal Pradesh, Bihar, Sikkim, Jharkhand, Nagaland, and 13% Punjab. Overall the financial literacy rate of INDIA is 24 %, China’s financial literacy rate is just as bad 28%, 38% Russia, 35 % Brazil, South Africa 42%. Percent bricks are a mess when it comes to financial literacy. Developed countries aren’t much better off. 38 % of US households have credit card debt. 33% of American adults have saved zero dollars for retirement. The lack of financial literacy is a global problem. Most of us end up turning to our friends and family for matters of personal finance, many of us do not even know finance. What should we do?


Fix the basics, the answer again lies in our school classrooms, it’s there, that we should start talking about finances. We must include financial literacy in the school curriculum. It will help people understand economics, understand loans, interest investment, budgeting.

Today many students take high-interest loans for college, spend much of their salary repaying debt, fail to save and take credit cards to meet their expenses, and then finally get trapped in a cycle of borrowing and paying off. Today the concept of a budget is alien to many millennials and even older people. It’s hard for most people to follow simple steps like determining income, calculating expenses, setting realistic saving goals, and tracking them.


A survey found that 72 % of Indians are unaware of how much to put aside or invest to achieve financial freedom, 76% said there is a need for more education, in the financial planning space 51 % of millennials said- that their level of personal finance knowledge is holding them back from making financial progress. Financial literacy helps to make that progress, it helps to maintain a healthy credit score. In many countries it is hard to even get a rental apartment if you do not have a good rental score; recruiters too take credit scores into account. Financial literacy can also improve a person’s standard of living. Estimates say that one must need at least one million dollars to retire. Financial literacy can help to make smart investments without having to be frugal.


The key to a good life is not saving aimlessly, it is smart investments. Thus it’s a subject that we must all deep dive into. What should you do to get a hand on ideas? Well go online, there are many courses on fundamental finance. Many of these courses are free, no matter what your age is. It's never too late to learn to educate yourself, educate others, see how to maximize your saving, secure your tomorrow without compromising on your dreams.




References: The Economic Times, Gravitas Plus

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2 Comments



jaya v
jaya v
Oct 17, 2021

Very well defined

Very nice

,

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