Financial literacy is a sphere of knowledge that is one of the essential life skills that should be taught to us from a correct age. Apart from learning Pythagoras’ theorem, this subject should be a critical addition to our syllabus.
As a millennial, specially the ones in their unemployed teens and early twenties, we tend to believe in “make merry’ life style without ever considering the consequences of our impulse spending and the future.
But when we are suddenly thrown into an employed system of life, it is a given that we won’t know how to handle money and the expectations of banks and the market.
The average net worth of a millennial, let’s say a 22-year-old girl, is estimated to be -$39, 984. It is kind of mind boggling when we think of the fact that we don’t even have a job yet and you are already indebted to the bank!
And with that unsettling thought we are here to introduce you to some of the basic terms and concepts to ease you into financial literacy.
1. MONEY BANK ACCOUNT:
5. CREDIT SCORE:
The points are based on your credit transactions, how much you owe to the banks, if you have ever borrowed money and even the fact if you paid your bills on time or not. It comes in handy if you ever want to take a loan or make other transactions.
6. SIMPLE INTEREST:
For example, you lend your friend Rs. 100 with an interest of 1% for giving you the money. Now at the end of the year when he/she pays you back, he/she would also add the interest money along with your principal amount.
100 + [ 1% of 100] = 101
Thus, you will be earning a profit of 1 Rupee.
7. MUTUAL FUNDS:
It is a given fact that nobody is born with all this knowledge but it is never too late to learn about your money.
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