Importance of Financial Education

 In simple words, Financial Education is the most important education one should acquire by the time he or she turns 18. You don't need to be a businessman, entrepreneur or an investor to know about this education. 

Financial Education is a vital knowledge of each and every citizen of a country should possess. It should be part of your life, and in reality, it is. 

Financial education simply consists of 5 pillars. Earning, Saving, Spending, Borrowing and Protecting. Budgeting plays the most important role in this process.

Well, don’t worry - we will discuss each and everything about Financial Education in detail. After this article, you will not have to keep searching on the net about the importance of financial education. Just read this and implement whatever has been mentioned. Don't waste your time surfing the net about the same thing. 

Before starting. Let me tell you my story so that you can be more comfortable and confident enough that I am the right person to tell you about financial education.

I am 27 years old. I started earning at the age of 13 and I still remember the day when I made my first dollar. 

I had no idea about financial education at that time. And no doubt I was a kid. 

Since I belong to a Middle-Class family I know that value of money. Middle-class people know about dreams and how hard it is to pursue them.

But yes it is 100% possible to pursue them. If I can do it then even you can too.

I started learning about money when I was 15 years old. At that time I saw a dream of having my startup (Company). I don't know why but I love startups more than any corporate businesses.

Once Steve Jobs was asked in an interview, ‘Why Apple computer are the most successful company in the world.’ and do you know what he replied?

He said, “Because Apple is the biggest startup in the world.”

Well, similarly as I started dreaming of having my own business at the age of 15. Hence I used to dream about it all day, even during my classes at school.

Finally, at the age of 17, I decided to start my own e-commerce company. I was the CEO, CTO, CFO, WORKER, DRAFTSMAN, CRAFTSMAN, SWEEPER etc everything for my company. I didn't had any team.

Finally, my first business failed. And I was disheartened because my Final Examination was very near. Neither I was able to make my business come true nor I was able to focus on my studies.

You can call it a period of DEPRESSION

I took this failure very seriously and concluded that ‘Lack of financial education was the reason why I failed.’ 

I had invested in things which were not at all necessary. I Invested money on buying costly chairs, tables, computers, domains etc. These were worthless. And let me tell you that if I would have started by sitting on the floor, I would have been successful.

So, finally, I decided that before I start my second attempt. I will learn about Finances.

Since that day I am learning about money and each day my knowledge multiplies. [So, I may be the right person to guide you through.]

So, I would like to share my knowledge with you. I will be very transparent. I demand only one thing from you. PATIENCE. Please keep patience while reading this article as it requires peace of mind and your time to understand the points. 

Still with me. OK, without wasting more time lets begin. 

I have divided this article into two parts. 

  1. Initial Level

  2. Advance level

Initial Level because I am considering you as a beginner. And I suggest you start here because it will be easy for you to understand the advanced level

Importance of Fincancial Education


Before we begin let us view why Poor people stay poor?

And the answer is :

  1. They blame other people for the lack of their money.

  2. They trade their time for money.

  3. They believe that money is only for the greedy and the selfish.

  4. They are consumers and not savers or investors.

  5. They max out their credits. 

  6. They don’t get their financial education.

Hence, you should note that readers of are not in, ‘the poor people’ category. We are different and we will become rich and richer together. [Please remove the above habits if you have them.]

So, let's revise back the basic components [pillars] of Financial Education.

  1. Budgeting

  2. Prioritizing saving money

  3. How does the investment work ?

  4. Understanding debts

  5. Spending habits

So based on the above components we will derive the main aspects of financial literacy. 


Well, I have already published an article on, ‘How to Make a budget Plan?’ On this website. 

Let me share with you my journey about how Budgeting my finances have changed my life. 

When I was 18 years old I came to know about Apple MackBook’s and their specifications. Since that day I have a dream of owning one for myself. I even decided that, ‘I will buy one this year.’ 

But to be honest I don’t have that still. It is not that I can’t afford that. It is just because I don’t need it right now. 

$1,000 or $1,00,000 is nothing for me now in 2020. [Although the COVID-19 has affected my business a bit.

I have prioritised my spending habits. If windows laptop can do my work then why will I spend bucks on Mac. 

I am sure you must have understood what I want to say. Yes its budget. In my budget MacBook has no place and I strictly follow it. 

Related : How to make a perfect budget plan ?

Prioritizing saving money

Money speaks only one language, ‘If you save me today I will save you tomorrow’. Yes, the first step towards financial independence is, the habit of saving. 

I started my financial independence journey through saving. And that to in a Savings Banks Account. 

I know you will call me foolish because it pays very low interest rate [almost @3.2 p.a.] and yes it is a loss deal in the long run [because the inflation rate is higher than the interest earned.] 

But I will suggest you to go for it if you are begineer. [@ age of 15 - 18 years students].

The most important advantage of saving in a savings account is that it is a 100% safe investment [Take care of the bank, sometimes banks do fail.] you can also go for Fixed Deposits etc. Fixed Deposits gives interest rates higher [6.5% - 8.2%] than savings accounts interest rates. 

If you are a pro and know investing a bit better then I will highly suggest you to invest in Stocks and Real Estates. ELSS funds and Stocks have potential for higher returns [Caution : It has high market risk]. 

You can also buy golds and silvers #commodities in order to have safe investment. 

How does the investment works

Investings is a magic. Most of the people don’t understand this. And you will be shocked to know that in India only 2.0% of the population invests in stock market. 

Very few people know about it better. Most Indians are afraid of the word Share Baazar. But, in today’s era it is necessary for each and every individual to know about it. We have out full article on the topic investment, How to invest money to get highest returns etc. 

Related : How to survive a recession?

Understanding Debts

There are two types of debts - good debts and bad debts. Home loans can be considered as good debts, because they have TAX Benefits. But, Personal Loans are considered as Bad Debts because it has no benefit in TAX. 

You have to understand the difference between the two. 

You must have also heard about the author of the book Rich Dad Poor Dad, Robert Kayosaki. He always talks about debts. And most of the time he talks about how to use debt as a tool to earn more money. 

But I will strongly not recommend it. It may be dangerous for you. Making money from debt is not an easy task. It will take time for you to learn the basics of it. Once you get mastery then you can try using debt as a money making tool. 

But, Still if you want me to tell you about, How to use debt to make money? Then you can comment below. If more than 15 comments come then I will definitely write a post on it. And please don’t forget to SUBSCRIBE to our blog, for instant notification. 

Spending Habits

You must have heard this quote, ‘No one became rich by saving.’ And yaaaaa, it may be true for some people, but yes - you can neither become rich by spending

I am not telling you to live a super frugal life. But you must know the difference between spending and saving. And I know you know it better. 

Spending money on things which will not bring back returns is useless. 

I know a friend of mine who saved money for 3 years and wasted it on buying a car. Yaaa, a car is a liability, unless you really need it. Its price depriticates day by day and year by year. 

You should spend money in land, gold, silver starting or trying a new business. 


My friend, I think this post has gone too long. I will give the link to the second part of it. Please, continue reading from here for the ADVANCED LEVEL. I will conclude it over there. 




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