Personal finance is specific to an individual and includes banking, purchase of financial products like credit cards, loans, insurance etc.
Why is Financial Literacy Important
Major Life Skill
Financial literacy is a major life skill one needs to have as it increases one’s capability in planning finances, managing budgets and generating savings
Informed Decision Making
Financial literacy makes ordinary individuals into informed and questioning users of financial services.
Beyond Investing
It is not just about markets and investing, but also about saving, budgeting,
financial planning, basics of banking and most importantly, about being “Financially
Smart”
Additionally, financial literacy will ensure one’s financial well being and also protect individuals from financial frauds. Lacking the knowledge of these skills leads to financial illiteracy, higher expenses than income, accumulation of debts, & other negative consequences
What is Finance in Simple Words
Finance is the management of money. It includes activities like savings investing, borrowing, lending, budgeting, and forecasting.
Finance has 3 main categories
Corporate finance includes activities related to running a business. Like the issue of stocks and bonds and also includes activities related to financing a project.
Public finance includes budgeting, taxing, spending by the government for the welfare of the public etc. comes under public finance.