Why is Financial Literacy Important for Students?

The financial knowledge enable students to take stock of the finances. It helps them to list down the financial requirements, get down to budgeting, and then find ways to fulfill the needs. Learning about finance makes students understand the basics of banking, credit, saving accounts. Thus, early learning prepares us for life, helping us steer clear of any financial chaos in the future.

What is Financial Literacy?

Understanding finance empowers us to understand how we earn, spend and manage money. It is about getting acquainted with how the economy and taxes work. It tells us how the banking system functions, the common terminology used, and how they affect our lives. All this allows us to take control of our personal finance better and prepare for a safer financial future.

The learning need not be time-consuming or complicated. Some of the resources can be newspapers, magazines, podcasts, social media platforms. You can also visit various personal finance websites like NUCash.in.

These neo bank sites explain finance in a simple and easy-to-understand language. It also offers students savings account, credit cards and instant personal loan for students.

Also Read: What Is Credit Score And How To Check It

How can Students Improve Finance Knowledge?

College students should work on certain concepts to become better at managing money. This can help them in making informed financial decisions not just today but for the rest of the life. Students can embrace some of the good habits listed below for a secure future.

1. Budgeting: Know the Basics

Budgeting is the best way of keeping a track of our finances. It helps to know from where the money is flowing and where all it is going. It is a way to understand the earning and spending. This can be easily done today through different apps meant for the purpose. A college student could note down the total money s/he gets each month. They can map the various heads under which their expenses go. These expense heads may include like accommodation, food, clothing, and miscellaneous requirements.

A keen analysis could help the student to understand how much is being spent in what section, and amendments could be made in the spending pattern. The habit of financial planning as per the budget can play a big role in tracking financial goals.

Also Read: A Guide to PAN Card for Students

2. Saving and Investment: A Closer Look

Students should understand that we earn for both a secure present and a secure future. And we should know how to save money and invest money to make our money grow.

From the beginning, students should read a lot about various ways for saving and investment. Knowledge about topics like life and health insurance, mutual funds, fixed deposits, and retirement plans is a must to avoid any financial stress. It is imperative to learn about various smart investment options like equities and mutual funds in order to know how to make our money grow.

Students could start with making little savings each week or month. This practice would help to develop a habit of saving along with learning about rainy day funds.

Also Read: How Savings Account Helps In Financial Education

3. Expenditure and Debt: Understand Well

It is crucial for students to learn about various lending products like loans and credit cards and the interest rates levied. Students should learn to use these tools responsibly. In case they don't do so, they might get entangled in debt traps which can entail serious implications. So, a lot of planning and analysis should go into making any kind of big expenditure that might need a big loan amount. Regular repayment in the form of EMIs or equated monthly installments for any loan, be it credit card or personal loan, is a good financial habit that should be embraced from an early age. This is a good way of increasing our credit value.

To start with, students could learn all about education loans, their related aspects, and how they function. They could also opt for online instant personal loans for students offered by NuCash to fulfill various lifestyle needs.

At NuCash, while availing instant personal loans, a small monthly fee is all that is needed to enjoy the benefits, and no hidden fees or escalating interest rates are involved. Visit NuCash, a simple and user-friendly online platform offering instant personal loans for students, student savings account, and credit cards that would bring flexibility in your budgeting.

Also Read: What are the benefits of a student bank account?
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FAQs

Q. What is credit?

Credit refers to the amount of money you can borrow.

Q. What is insurance?

Insurance is a financial product that provides financial protection to the policyholder or his/her family against unexpected financial losses in lieu of the premium paid to the insurance company by the policyholder.

Q. What is net banking?

The digital method of banking is called net banking. In such a case banking services are available through the internet. Simply put, you can use a connected device to transact

Q. What is interest?

Interest is the amount paid to the bank by the consumer for being allowed to borrow money as a loan.

Q. Are there tax benefits on education loans?

Under Section 80E of the Income-tax Act, you can claim tax benefits on the interest paid on the education loan availed for higher education. Such benefit is available either for 8 years or until the interest is paid, whichever is earlier.

Q. Who can claim the deduction for an education loan?

You can claim the deduction if you have taken the education loan for your spouse, children, or for a student for whom you are a legal guardian.

Also Read: All about Privatization of Banks in India