Ever since IIFL launched its Financial Literacy Agenda for Mass Empowerment (FLAME) initiative, we have been engaged in a seamless and fruitful dialogue with a wider cross section of people across the length and breadth of India – whether school students, collegians, housewives, young executives and entrepreneurs or senior citizens. While each passing day teaches us more about the art and science of financial literacy communication, we have, from Day One, customized our communication in line with the sensibilities and needs of each target group of financial inclusion. Hence we have spread awareness through as many respective vehicles of communication and interaction – whether contests and quizzes, workshops, interactive sessions, seminars, portal and website information and of course books & publications.
Based on our field exposure till date, we have come to acknowledge the fact that the process of spreading financial awareness begins with exploding quite a few myths about financial literacy which are more deep-rooted in the minds of common people than what meets the eye…
Financial literacy is only about crunching numbers
This is one of the foremost wrong notions that keep many away from embarking on this path. Many still believe that one needs to be good at math to qualify for a course in financial literacy. Financial concepts do involve arithmetic calculations no doubt, but in essence it is a practical life skill, in that it’s beyond spheres, fields and qualifications. It teaches one about critical matters like the psychology of money, the need for discipline and determination in saving and investing, the knowledge of Do’s and Don’ts in avoiding the pitfalls and the like. Number crunching is only a part of the whole sum for which help is readily available. What’s more important is the core knowledge that teaches one to respect money’s worth and value in real life.
Financial knowledge is for the money minded
This is yet another popular myth doing the rounds. Many believe that knowledge of money matters is synonymous with perpetually chasing money and being “money minded”. That’s ridiculous because money skills are not an ‘elective’ course in life. Earning good money and then growing it through saving and investing is in fact our foremost duty in life. Yes, as the Master Card ad says: There are several things money can’t buy that are also integral to one’s life but money doesn’t take away those from you if you are aware and agile in your financial life. To sum it, financial knowledge is not about being greedy, it’s about being responsible members who are sensitive to fulfilling the needs and aspirations of the family, invariably expressed in money terms.
Financial literacy helps those with money
Another excuse to stay away from the field of action. It’s a proven fact that small amounts of saving and investing over large periods of time can yield phenomenal returns. So, it’s pointless blaming our forefathers for leaving us with less wealth. Instead, we must bless our dependents by beginning as early as possible. And if we have missed the bus for long, it’s never too late to take that first step. The compounding effect will still do wonders but you need to let it by making a beginning.
Kids can’t absorb financial concepts
Based on our experience with several schools, we can confidently say that students are among the best audiences for such programs. Not only do they fare well in the contests and examinations, they ask intelligent questions, mull over the new learning with sensitive involvement and are keen to practice the learning in real life. The seemingly intricate concepts like compounding, leveraging, averaging – if taught effectively – are well received. In fact, it’s elementary that such concepts be taught as early as possible to help these young achievers manage their money with authority and responsibility later in life.
Financial competence is an inborn skill
Nothing can be farther than the truth. Like every other skill, financial acumen can be developed with consistent effort over time. Yes, the degree of proficiency may vary inherently – some may be more adept than others, some may be keener than others – but with consistent effect and dedication, one can always acquire financial knowledge effectively and efficiently. It’s often found that learning led by instruction lags behind the learning led by interest. So we need to get interested before we aspire to become proficient. And one has to remember, financial literacy is not about being financial wizards. It’s all about understanding the essence such that one takes better financial decisions in life which may also involve seeking the help of a financial wizard to help you with smart decisions. But you still need to know the basics.
Hope that through our programmes, we are successful in exposing the irrationality of their unfounded existence.