The Importance Of Financial Literacy

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In the contemporary society everything is based on money. As the famous saying goes, “money makes the world go around”, it occupies a predominant position today and it is wanted by everyone for everything. According to the theory of a famous psychologist Abraham Maslow, money is the most important prerequisite for a person to move up the human need pyramid. As blood is important for our body, Money is important for our life. It is the boss that decides everything in our life. Such indispensable money should be expended prudently and conserved cautiously for future. Financial literacy enables one to make prudential and astute decisions with regard to money and thus plays an imperative role in economic and social well-being of the individual. Significance of financial literacy Financial literacy offers an individual the proficiency to handle money so that it works as wished. It is promulgates about the competency of managing money. Intact financial literacy echelon facilitates people to accomplish financial self-sufficiency and stability. It helps an individual to formulate luminous plans with regard to earning, spending, saving and investing. NABER working paper series on financial literacy defines financial literacy as, “the ability to use knowledge and skills to manage one 's financial resources effectively for lifetime financial security.” People of all age groups require sound literacy in managing finance. It not only affects the individuals, but also the development of
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