When we speak about financial literacy or understanding its meaning, the major component is the ability to understand and effectively use financial skills such as personal finance including budgeting, investing, and household financial management.
Household financial management is primarily important and correlated to our other financial decisions. Only 27% of Indian adults meet the minimum level of financial literacy as defined by the Reserve Bank of India in March 2022. When it comes to women, the percentage sinks down further to 21%. These figures indicate that there is a need for a strong foundation of financial literacy, especially for women in the country because by educating a woman, the entire family is being educated as a result of which the well-being of future generations is secured.
We all have seen our mothers, grandmothers, or any elderly women in our respective households being responsible for managing the finances for day-to-day domestic responsibilities. Women have been good with finance for generations and now it’s time for women to be more financially literate and have a more prominent role to play in the overall financial planning of the family.
Reasons why more women in India need to be financially literate:
- It helps women be independent and reduces their dependency on the male members of the family for financial decisions.
- Financial literacy enriches Personal and Professional growth, as women were one of the worst hit sections during Covid-19.
- One can be prepared for emergency situations and they are the ones who educate children at home which boosts the literacy rate. Investment-related decisions need to be more independently made by women.
- Global gender gap report: India is at 140th rank out of 156 countries [Source: World Economic Forum].
- An increase in women’s literacy rate translates into an overall decrease in the pay gap and gender inequality.