Enhancing Financial Literacy: Strategies, Challenges, and Global Initiatives

Enhancing Financial Literacy: Strategies, Challenges, and Global Initiatives

Geetha Manoharan, G. Nithya, Abdul Razak, Subhashini Durai, Seema Sharma, Sunitha Purushottam Ashtikar
Copyright: © 2024 |Pages: 18
DOI: 10.4018/979-8-3693-1750-1.ch006
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Abstract

Modern financial literacy is necessary for making smart financial decisions, navigating complex markets, and planning ahead. Financial literacy's history and importance in today's complex financial systems and diverse investment options are examined in this chapter. Financial literacy knowledge, attitudes, and behaviors are examined, as well as international campaigns. The history, benefits, methods, and components of financial literacy are covered in this chapter. The complex global economy has boosted US financial education credibility. The chapter claims financial literacy prevents mistakes, prepares for disasters, and helps achieve financial goals. To improve financial literacy, it covers credit, budgeting, and saving. Financial education can protect the Indian economy, boost growth, and reduce poverty. Financial literacy efforts by the Indian government and regulators are also examined. The authors found that financial education helps people make smart financial decisions and build wealth.
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Introduction

The evolution of formal financial education institutions in the United States has been complicated, beginning with informal advice from parents and experts. Financial literacy has evolved critical educational issue since the twentieth century, owing to its importance in navigating the complexities of the global economy. Financial literacy aids in financial decisions efficiently in terms of its benefits, which include avoiding costly mistakes, being prepared for emergencies, and reaching financial goals. Along with practical advice, the chapter includes budgeting and credit understanding tips that can help improve financial literacy. It emphasizes to reduce poverty and promote economic growth and financial stability. The chapter also discusses financial literacy initiatives launched by regulatory bodies and the Indian government.

Understanding Financial Literacy

Financial literacy has been ingrained in American culture since the country's inception. There were no formal courses or occupations in the field of personal finance at first. People turned to their parents, friends, and specialists for help navigating the complexities of money management. Personal finance education was first recorded in writing in 1737. The importance of money management grew throughout the nineteenth century, but there was little formal instruction in the literacy of finance. In the 20th century, official financial literacy classes were developed. Personal finance is now recognized as an important topic for education in the twenty-first century (Chotai, N. A., et al., 2023). Schools and colleges today emphasize financial literacy. Modern people must make active and knowledgeable financial decisions due to the rising cost of living and the global economy. They can invest in a wide range of foreign assets and currencies. As banking and financial transactions have grown in importance, so has financial literacy in several businesses (Manoharan, G., et al., 2024). All consumers, regardless of income or wealth, should be financially literate. This encompasses a wide range of data and practices. Many studies have proved that the common people have very little knowledge about the fundamentals of understanding economic prevalence.

Crucial Elements of Financial Literacy

Financial literacy is critical in today's complex economic environment, enabling people financially decisive, allowing them to properly manage money, ignore any level of mistakes, and to be working on with regards to their financial targets. In this country, it is very important to gain knowledge about literacy in finance can help reduce poverty while also promoting economic development, performance (Kumar, P., et al., 2024), and financial stability. To successfully navigate a world of diverse investment opportunities, banking services, and financial transactions. Personal, social, and national economic stability depends on critical elements of financial literacy, making it easier due to financial markets (Bhavya, K. R., et al., 2023).

Scope of Financial Literacy

The economic climate of today demands a high level of financial literacy. This knowledge is especially important in countries like India, where financial literacy can help reduce poverty while also promoting economic development (Satpathy, A., et al., 2024) and financial stability. To successfully navigate a world of diverse investment opportunities, banking services, and financial transactions, people must have a solid understanding of financial markets.

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