Published on February 12, 2022

Common phrases such as ‘invest in IPOs’, ‘diversify your portfolio’, and ‘buy the dip’ have been echoing in the news throughout the year 2021. The colossal world of finance has literally exploded this year. According to an article by Business Standard, the active investor count rose by a whopping 10.4 million last year. That continued to this year and we witnessed stock market investments becoming a part of daily conversations. But amongst this fad, where were you? Did you get a chance to explore any financial instruments? Did you ask your parents about their investment strategies in the reviving market? Was finance ever a part of your academic or peer-group discussions?

There’s a high chance that your answer to one or more of these questions might be ‘No’. And, it is quite valid. Financial literacy for students still has a long way to go. But does that mean you should sit idle and wait for the ‘right time to learn about finance’? Certainly not.

Why Should Financial Literacy Be Important To You Now?

Student financial literacy is a fundamental life skill that every individual needs to be equipped with. But what’s the hurry? People learn things with time, so will you. Isn’t it?

No. That is a tale of the past. Do not let yourself be deluded by that.

Let’s face the fact – your generation is smart! On top of that, you have an abundance of resources that were a dream for the previous generations. It takes you a few hours to learn how to use a new gadget, create a smart sensor, build a cool robotics project, or even decode a cryptic message.

But the one thing that halts your racing minds is money. The Deloitte Global 2021 Millennial and Gen Z Survey revealed that nearly half of the millennial and Gen Z population are stressed about their long-term financial future.

1. Reason? Both these population groups never got a chance to develop money management skills at school.

2. Result? Millennials find themselves in a fix when it comes to day-to-day finances, let alone securing their future.

3. What about Gen Z? Well, you’ve got time in your hands! Time is the only thing that will assist you in

So, you can make money work for you! You can start improving your financial skills right away, and achieve financial independence as soon as you want. But, how?

Lesson #2: Responsibilities Associated With Money

Now you truly understand why the world values money so much, don’t you? With that amount of value and power, comes a sense of responsibility. Remember the first time you asked your parents if you could borrow the car? Taking the car all by yourself meant being careful while driving, checking the fuel tank, following traffic rules, and remembering all the pieces of advice that came with that key.

Tomorrow if you earn a sum of money, your parents would probably advise the same – vigilance and mindfulness. Why? Because the common point here is responsibility. As you grow older and start making money, you hold complete accountability for your money –

• How do you earn it?

• How do you spend it?

• How do you save it?

• How do you invest it?

Whoa! That seems like a lot of responsibilities to take care of, doesn’t it?

Relax! Keep reading, we got your back!

Lesson #3: Budgeting, Saving, And Investing

In the last two lessons, you have realized that your money (be it your pocket money or your own income) is significant and you are solely responsible for it. Would you dare to be reckless with it? Absolutely not! Then why haven’t you started managing it effectively yet?

Nothing to worry about, here you go –

1. Budgeting – Once you have a sum of money, a budget allows you to control its flow. You set certain goals for yourself and decide on 2 things – Spending and Saving. In your spending plan, you can include your necessities and wants, depending upon your goals.

You can use a planner like this and customize it as per your needs. Try filling it out!

2. Saving – The remaining amount comes into your savings. Out of this, some amount can be saved for short-term goals. The remaining amount can be used for investments.

Morgan Housel has articulated the importance of savings amazingly – “Saving is a hedge against life’s inevitable ability to surprise the hell out of you at the worst possible moment.” Need we say more?

3. Investing – Continuously investing a portion of your money makes it grow over time. This process is called compounding. To learn more about the ways in which you can invest your money, check this out.

Lesson #4: Seeking Financial Knowledge From The Right Resources

The three lessons you’ve covered till now can give you the best headstart you need to be financially literate and manage your money smartly. But does the learning stop here? Definitely not. As we said, these 4 chords are the basic essentials you need to build exceptional money management skills.

The last lesson is to NEVER stop learning. Money is dynamic in nature. The ones who sleep on it, lose the marathon to the ones who keep learning and implementing smart money management tips.

The best source of all the financial knowledge you require is in your hands right now! The internet hosts several resources like mobile apps, podcasts, books, games, and whatnot. Nobody is stopping you from setting your financial goals, picking the best resources, and learning from them.

• Remember, just reading and learning would never give you results until you implement.

Your First Step In The Right Direction…

Today, you have taken your first step towards being financially smart and independent. Continuous improvement of your financial skills can lead you to places you’d have never expected.

Money management for students is an underrated skill. The sooner you realize the hidden benefits of understanding how financial systems work, the better you can secure your future. While the academic institutions might take some time in incorporating financial literacy for students, you can get ahead of the crowd with us.

Big Red Education has been working tirelessly towards making the students of today financially smart and successful. Head over to many such articles here, use the technique and resources provided to build your own personal finance strategies, and share your favorite ones with your friends. A single action of yours can lead to a great start. Get started today!