Better economic lives can be catered to by having financial literacy. The monetary issues faced and suffered by the younger generations of Indians include a steadily surging cost of living, high accumulation of student loans, and early pressure in terms of achieving financial independence. Had they been financially literate, they would have possessed financial management skills and an investment decision-making mentality, as well as prepared plans for long-term finances.
The Millennial generation, born between the early 1980s and mid-1990s, and Generation Z, born from the mid-1990s to early 2010s, influences society a lot based on the experiences and values they bring. Millennials grew up in the fast pace of technological advancement, which made them digitally fluent and agile. Gen Z is that generation which embodies the very definition of creativity and authenticity in social communication platforms like TikTok and Snapchat. They are branded with having social consciousness as well as having entrepreneurial drive and diversity matters for them, thus they believe in gigs and remote work.Â
Financially literate people can easily solve the fundamental needs of budgeting, saving, and investing. They generally avoid typical missteps in finance. Their awareness regarding debt management and financial products enables them to make wise decisions under stability with fewer opportunities for creating impossible levels of unmanageable debt. Moreover, literacy in finance is indispensable for financial security personally while promoting habits in finances for generating wealth and sustaining such stability in finance. Financial literacy in millennials and Gen Z should, therefore, be there to build a financially resilient and wealthy generation, better qualified for survival with financial complexities and optimization of chances to appreciate growth.
One of the prime advantages of financial literacy is enabling students to take responsibility for managing debt responsibly. Most students enter higher education with either student loans or credit cards but do not understand the appreciated interest rates and loan payback commitments. If equipped with financial information, they will be able to reduce their indebtedness and avoid default in their loans, by following an organized manner for making loan payments. Moreover, budgeting skills help in controlling costs of tuition, accommodation, and other daily expenses during college life. Such skills reduce financial stress and prevent overspending.
Financial literacy promotes building wealth through the adoption of savings and investment practices. Understanding how to use funds can create and increase one’s wealth, thus increasing security over time. Financial literacy helps make informed financial decisions that helps individuals manage their incomes, expenses, debts, and approach major events such as home buying or retirement. Moreover, individuals learn concepts regarding interest rates, credit scores, and fraud prevention. Thus, individuals avoid these common financial pitfalls while resisting financial fraud and bad financial choices.
Financial literacy is also founded through educational institutions. This can have a positive effect on a student’s long-term financial behaviour from an early age because of the concepts established by budgeting, saving, and investing. The enhancement of skills will make people behave responsibly in handling their finances and thus create independence while reducing future dependency on other people for financing purposes. Financially literate students will have a solid base that can help in dealing with financial challenges and take up opportunities as they arise.
Financial literacy also impacts career-readiness. The knowledge of finance concepts like taxes, insurance, and retirement plans helps the students make wise decisions in terms of the careers they pursue, and understand the negotiation of employment contracts and compensation packages. Such students will have an edge to their advantage when they move into the workforce and make decisions to align their short-term goals with long-term aspirations for careers.
Knowledge in finance develops the entrepreneurial skills within the minds of students, making them feel more comfortable to venture into business. Budgeting, financial forecasting, and investment will guide young entrepreneurs on running their startups and making intelligent decisions on their businesses. This education will help enable them to gain an entrepreneurial mindset and learn how to understand the financial aspects of running a business.
Finally, it promotes economic citizenship. The literate are in a better capacity as consumers when it comes to quality decision-making regarding the products they buy and contribute, therefore improving their financial position in the surrounding communities in which they stay. Consumers’ knowledge of financial structures and consumer rights is basically an access point for most youngsters to assume responsible positions of economic citizenship, making their choices define the end results for the society around them.
Thus, financial literacy is very important for Gen Z and Millennials, as it gives them the skills they need to secure financial independence, make knowledgeable decisions, and address both personal and professional financial challenges. Early exposure to these principles provides a strong foundation in enabling young adults to obtain a stable financial future as well as confident participants in the economy.