Money does not grow on trees!

During childhood we often heard this phrase at home from our parents and we are sure you must be using it to your children. What we want our loved ones to interpret by Money doesn't grow on trees is you must not spend too much money as there is only a limited amount of it.

Typically, we see following conversation in Indian homes:

·       My daughter Avani wants an iPhone for her 17th birthday, but I cannot afford it. So, I tell her” It is costly, Avani. Go for smaller budget. However, if Avani still continue with her insistence then we tell her “ No, because Money doesn't grow on trees!” 

·       "Mum, can you give me some more pocket money?"
"No I can't – money doesn't grow on trees, you know son."

If we want our children to learn more on this we must financially literate them.

Financial literacy? ….what is it all about? Let’s understand in detail:

Literacy and financial literacy are two distinct concepts:

Literacy:

- Refers to the ability to read, write, and communicate effectively

- Encompasses skills like comprehension, vocabulary, and critical thinking

- Essential for accessing information, education, and personal growth

Financial Literacy:

- Refers to the ability to understand and manage personal finances effectively

- Encompasses skills like budgeting, saving, investing, and debt management

- Essential for making informed financial decisions, achieving financial stability, and securing one's financial future

Key differences:

1. Focus: Literacy focuses on language and communication, while financial literacy focuses on personal finance and money management.

2. Skills: Literacy involves reading, writing, and comprehension, while financial literacy involves budgeting, investing, and financial planning.

3. Impact: Literacy affects education and personal growth, while financial literacy affects financial stability and security.

4. Consequences: Lack of literacy may limit education and opportunities, while lack of financial literacy may lead to debt, financial stress, and reduced financial security.

Both literacy and financial literacy are essential skills for individuals to possess, as they complement each other in achieving overall well-being and prosperity.

India's financial literacy rate is lower than the rest of the world, with less than 25% of adults being financially literate. In comparison, the global literacy rate for all people aged 15 and above is 86.3%. India's poor financial literacy is attributed to various factors, including a lack of education and awareness about financial concepts and instruments. To address this issue, financial regulators in India have launched initiatives to improve financial literacy, including the National Strategy for Financial Education.

Here are some of the RBI's initiatives on financial literacy:

- Financial Literacy Week: RBI observes Financial Literacy Week (FLW) every year since 2016 to propagate financial education messages to the public. Generally it is celebrated in the last week of February.

- National Strategy for Financial Education (NSFE): RBI has created a joint charter called NSFE, detailing initiatives taken by them for financial literacy in India.

- National Centre For Financial Education (NCFE): RBI has prescribed content for basic financial education, including a Financial Literacy guide, Financial Diary, and set of 16 posters prepared by RBI.

- RBI90Quiz: RBI has launched a quiz for college undergraduates as part of celebrations marking 90 years of the central bank's operations.

- Collaboration with educational institutions: RBI collaborates with institutions such as the NCERT to integrate financial literacy into school and university curriculums.

NISM (National Institute of Securities Markets) is a public trust established by the Securities and Exchange Board of India (SEBI) to promote financial literacy and securities market education in India.

In the below link you will find a FREE e-learning programme of 22 hours titled “Financial Literacy Course for Bharat”. We recommend this program for all age groups who want to improve upon the financial literacy.

https://www.nism.ac.in/e-learning-programs/

We want all of you to embark upon this journey of financial literacy soon and become literate ……………………. Financially!!

So, you don’t have to use again the phrase “Money doesn’t grow on trees!” because you know where Money grow!!