Is it the middle of the month, and you are already struggling with your expenses? Well, it is nothing new. Most of you face such problems and fail to cope with the situation. You can always avoid such situations by planning your finance well. But do you know how to do that?
It is sad, but the consumer market is mostly driven by credit cards. As per research, credit card usage has increased from 24% in 2017 to 27% in 2019, thanks to the new way of shopping. Online shopping has allowed people to explore credit usage and made the process easy. But does that make you smart or financially literate? Of course not.
The Financial Industry Regulatory Authority (FINRA) frequently publishes reports on financial literacy as part of its National Financial Capability Study. Their recent reports showed only a bit more than a third of the respondents had proper knowledge of finance. The results state how people are ignorant about finance and the lack of financial literacy.
Before you get stressed out with these data, let me help you understand why finance is important in real life and why you must learn it well.
Role and Importance of Finance in Real Life
A major problem among individuals is their lack of understanding of finance and how it affects their daily life. Students pursuing the subject avail finance assignment help online to sail through the tasks. While it is not wrong, but most of them do not go through the solutions and fail to understand the subject well.
So, to make you realize the importance of finance in daily life, here are some instances where the subject plays a major role:
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Ensuring that your financial needs are fulfilled
Can you live a peaceful life without earning money? Some philosophers might say, ‘yes, you can’, but you know it’s not possible. You invest a lot of time getting the necessary education and proper degrees to grab the right opportunities and earn a lot of money.
While earning money is important, understanding if it fulfills all your needs is equally important. Here are some common financial needs we all have to fulfill irrespective of how much we earn:
- Payment of bills on time
- Loan management
- Managing credit cards and credit score
To make sure that all of these are fulfilled, you need to plan your month well and ensure that you save some money after fulfilling them. Finance teaches you the best ways of doing it and managing your salary well.
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Managing your income
As mentioned earlier, the importance of saving cannot be denied. So, spending all the money you get at the beginning of the month will not help. Finance professionals are well aware of such needs and extend their help for better management.
Financial planning will help you segregate income and expenses and help you save money for the future. It will also help you identify which expense is important and needs to be handled first. Your monthly bills, tax payments, etc., will not seem stressful once you have a proper financial management plan.
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Budgeting, savings, and expenses
Impulsive purchases are very common among new joiners. Fulfilling some dreams or buying things you wished for is not wrong, but if it affects your daily expenses, then you must plan it well. Unnecessary expenses will hamper your plans for the future.
It is necessary to control your whims and fancies when it comes to spending. Financial management will help you spend your income wisely. You will be able to plan spending your money on buying what you desire properly.
Work as per the plan and stick to it. Avoid overspending and ensure to save money for the future.
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Investments
You cannot let go of a chance to earn more using your money. The share market can help you invest and earn a lot. But do you know how to do it? Most people are unaware of financial instruments and fail to invest wisely. Knowing the subject well can help you get the best return on investment and earn a lot of money.
The lack of knowledge of finance has made it impossible for all to invest wisely. Savings is not enough. You need to know how to earn more and have a better life. As per research, the people who claim to have immense knowledge of personal finance failed to answer basic financial questions correctly. Only 19% were able to answer them correctly.
The stats suggest a lack of financial knowledge among people. However, once you know the concepts, you will be able to plan your finances well and invest wisely.
It is necessary to understand how finance plays an important role in daily life and work on the subject. You will face challenges while learning the subject. Try to cope with them, ask for finance assignment help from the experts and work on the problems to gain proper knowledge.
Final thoughts,
It is very disappointing that the millennial suffer the most due to a lack of financial knowledge, as per the TIAA Institute. Most of you don’t realize how financial planning can help you overcome many difficulties. The millennial are overburdened with mortgages and student loans; more than 44% are stressed with their debts. So, to avoid getting more stressed, you must take the initiative to learn finance and plan things well for a better future.
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