Why is Financial Literacy Equally Important for Women

According to the National Centre for Financial Education (NCFE), only 21% of women in India are financially literate, as compared to a 29% literacy rate among men. This disparity highlights the urgent need to improve financial education for women in India. From managing daily expenses to planning for retirement, financial literacy is a crucial skill that empowers women to make informed decisions about their finances. 
Let us explore the importance of financial literacy for women and how it can empower them. Read on!

What is Financial Literacy?

Financial Literacy is the knowledge of financial aspects such as borrowing, budgeting, investing, taxation, and saving. Beyond knowledge, financial literacy involves adopting positive financial behaviours, understanding financial systems, and making informed adjustments based on financial outcomes.

Importance of Financial Literacy for Women

As women increasingly take on diverse roles in society and the workforce, financial education has become more crucial than ever. Here are some of the most important benefits of financial literacy:

• Protect Income and Financial Interests

It equips women with the knowledge to safeguard their earnings and investments, ensuring their financial interests are well-protected.

• Economic Independence

By understanding financial principles, women can make informed decisions independently, reducing their dependence on male friends and relatives for financial matters.

• Family Financial Management

Financial literacy builds confidence, enabling women to make wise choices that benefit their personal and family finances.

• Career Advancement

With financial knowledge, women can explore entrepreneurial ventures and investment opportunities, contributing to wealth creation and economic empowerment.

• Long-term Personal Security

As life expectancy increases and more women choose to live independently, financial literacy becomes essential for securing a stable and comfortable future.

ALSO READ :- 6 Best Business Loan Schemes for Women Entrepreneurs in India

Impact of Financial Literacy for Women

Here are some key areas where financial literacy for beginners can make a significant impact:

• Informed Borrowing: Understanding loan terms, interest rates, and repayment schedules empower women to make well-informed decisions when borrowing money.
• Debt Management: Knowledge of debt consolidation and different repayment strategies allows taking control of debts and work towards achieving better financial stability.
• Building Credit: Financial literacy can educate women in building a good credit score. A good credit score not only reflects responsible financial behaviour but also opens doors to improved financial opportunities. 
• Investment Planning: Understanding various investment options, such as stocks, bonds, real estate, and mutual funds, is crucial for building a diverse and resilient investment portfolio. An investment plan can help women safeguard their future. 
• Budgeting Skills: Effective budgeting is essential for gaining control over expenses, maximising savings, and working towards achieving important financial goals.
• Inter-generational Impact: Having a good understanding of financial matters allows parents to impart these essential skills and knowledge to their children. This helps in establishing a continual cycle of financial literacy across different generations.

Unique Financial Challenge Women Face 

Here are some of the most unique financial challenges women face: 

• Gender Pay Gap

Across the world, women often earn less than men for the same role, which affects their ability to save, invest, and accumulate wealth. This disparity can lead to long-term financial insecurity and dependence.

• Credit Score Disparities

Women may have lower credit scores due to various reasons, such as lower earnings, higher debt-to-income ratio, and less access to credit. A lower credit score can limit their ability to secure loans or obtain favourable interest rates.

• Career Breaks

Women are more likely to take career breaks for caregiving responsibilities, such as raising children or caring for elderly family members. These breaks can result in lost income, reduced retirement savings, and gaps in their professional experience.

• Loss of Employment

Women are often more vulnerable to job loss, particularly in industries that are less stable or lower-paying. This instability can disrupt financial plans and lead to economic hardships.

• Overlapping Duties

Women frequently juggle multiple roles, including professional, domestic, and caregiving responsibilities. The burden of these overlapping duties can limit their time and energy to focus on financial management and planning.

ALSO READ :- Why It Is Beneficial For Women To Own A Credit Card?

How Can Women Become Financially Literate?

Here are the ways women can become financially literate:
1.    To Initiatives for Self-education
The journey begins with the self. Women can start increasing their knowledge by attending webinars, signing up for online courses, reading financial books, and following some trusted financial websites. Several resources, including online videos, podcasts, and tutorials, are available online for self-education.

2.    Have a Conversation With Financial Advisors
Women can also look for a financial advisor to have one-on-one financial conversations. This can boost their confidence and clear their doubts quickly. However, women must ensure they are comfortable with their advisors and can ask questions and seek clarification whenever required.

Just like Rome was not built in a day, becoming financially literate also takes time. In the meantime, it is essential to meet your expenses without any additional stress. Poonawalla Fincorp provides a hassle-free Personal Loan for women to cater to their various needs.

How Poonawalla Fincorp’s Personal Loan for Women Can Help?

Here is a list of the benefits of our Personal Loan for Women:

• High Loan Amount: We offer a substantial loan amount, allowing women to fulfil their various financial needs efficiently.
• Attractive Interest Rates: Personal Loan for Women comes with competitive and attractive interest rates, making it easier for them to manage the repayment and overall cost.
• Collateral-free Loan: Women can avail the loan without having to provide any collateral, easing the borrowing process and providing a sense of financial security.
• Flexible Repayment Tenure: We offer loan with flexible repayment tenure, allowing women to choose a repayment schedule that suits them.
• Easy Application Process: The loan application process is streamlined and hassle-free, to ensure ease and convenience.
• Multipurpose Loan: The loan can be used for education, business growth, medical expenses, travel, and more, providing the flexibility to address different financial needs.
• No Foreclosure Charges: The loan can be foreclosed at no extra charge if paid from own sources. However, a 4% fee is applicable if paid from other sources.
• No Hidden Charges: Loan terms and charges are disclosed at the time of loan application, to avoid future surprises.

To Conclude

Understanding and mastering financial literacy is important for women to achieve financial independence and stability. It opens doors to opportunities and ensures a secure financial future. By enhancing financial education, women can confidently navigate their financial journeys and make informed decisions that benefit themselves and their families. Remember, it is never too late to start this educational journey. With resources readily available online, every step towards digital financial literacy is a step towards a more secure and empowered future.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
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