Generally, people who are financially literate are less vulnerable to financial fraud. 

A good financial literacy base will help support different life goals, such as saving for college or retirement, making prudent use of debt, and running a business.

In order to enhance your personal finances, improving financial literacy requires studying and practicing a number of skills related to budgeting, managing and paying off debts, and knowing credit and investment items.

In the average high school or college program, financial education is always missing, so you would have to self-educate if you don’t have financially knowledgeable parents or other mentors ready to pass on their wisdom.

You will slowly develop your tiny everyday financial decisions once you have developed some basic financial literacy. This is a great first step because, on the fly, many small everyday decisions need to be taken quickly without worrying about them for too long.

Calculating your net monthly income, which is how much income you take home after taxes, is the first component of financial literacy. This may include your wages or salaries, bonuses, and other passive income such as rent payments or maybe your income from the business.

You need to know how much money you are earning before you can start spending, saving, and investing. This part is pretty simple if you make the same amount each month. To identify your gross and net income, take a close look at your income, and note any other deductions, such as employer-sponsored health benefits or tax deductions, etc.

In a salary and have taxes deducted from it, most employees earn their net income, while most self-employed individuals receive gross pay from consumers and then have to calculate and pay the taxes themselves. Gross and net income are calculated a little differently for businesses that sell goods and services. 

If you're someone whose income varies from month to month, it can be a little more difficult to calculate your income, but it's still essential. Based on your historical earnings, you should be able to measure gross and net earnings. You are ready to spend responsibly on a personal budget after you have calculated your monthly net income.

Budgeting is the most basic part of keeping on top of your finances that one can learn. All, from a teenager to a housewife, a worker to a corporate executive, wants it. You need to know your income and earnings and you need to build and manage a budget that allocates money for different expenditures and retains a portion of it for savings and investments.

To reach long-term financial objectives, a monthly budget is a strategy to balance your income and expenditures. You organize your monthly expenditures into categories as you build a personal budget that will help you to identify your spending patterns and change them to meet your goals.

If you don't have a budget, at the end of the month, you always wonder where all the money has disappeared. Mastering the fundamentals of budgeting is where any financial novice should start from.

A strong basis for setting any goal is to make sure that  it’s “SMART”:

• Specific
• Measurable
• Achievable
• Realistic
• Time-bound

You may focus on more exciting goals after you have tackled high-priority goals, such as creating an emergency fund, planning for retirement, and shrinking debt. This may include making more money, investing, starting a business, or saving for a major purchase such as a laptop, car, or home and also for spending for a cause.

Any time you get paid, part of your budget plan and financial education should be to set aside a little bit of money for an emergency fund. A vital part of your financial wellbeing is an emergency fund. You won't need to go into debt if you end up in a bind to get out of the position you're in. You're never going to regret saving money knowing you have the tools to cope with an unforeseen case!

Any time you get paid, part of your budget plan and financial education should be to set aside a little bit of money for an emergency fund. A vital part of your financial wellbeing is an emergency fund. You won't need to go into debt if you end up in a bind to get out of the position you're in. You're never going to regret saving money knowing you have the tools to cope with an unforeseen case!

If you don't currently have one, there are several reasons why you should focus on increasing your emergency fund. The top three reasons 'why' are illuminated here:

Imagine if you need a long recovery period after undergoing an unexpected major surgery. How are you going to pay your expenses for the period of time when you're physically unable to work? Or maybe, in your home, you're the primary earner and your position has suddenly been made redundant. How are you and your family going to cope? While you get back on your feet, a well-prepared emergency fund helps you cope with these emergencies.

You can be forced to liquidate some of your investments without an emergency fund at short notice to pay for unexpected expenses.

In order to cover emergency expenses, having adequate emergency savings will eliminate the need to turn to debt.

Although a credit card can provide numerous advantages when used wisely, if you are not careful about how to use it, it can also lead to high-interest charges, increased debt, and a negative impact on your credit score. To help you to keep your financial health on track, here are a few best practices.

Make your payments on time. One of the big factors that affect your credit is your payment history. It can have a negative impact on your credit ratings if you make your payments late, and you will likely be charged a late fee.                                                              

Pay your credit card bill in full. It will help you from incurring high-interest charges by paying off your balance in full and on time.

Buy just what you can afford to pay cash for. This will help you avoid overspending every month and help you stick to your budget.

Stay well below your credit limit. One of the factors used to determine your credit scores is your credit utilization ratio (the ratio between the total balance you owe and the total credit limits on all your credit cards). A low ratio typically has a favorable impact on credit scores, whereas a high ratio has a negative impact.

The bank account holders are expected to witness the best of times when it comes to making banking transactions. Operating bank accounts and even making fund transfers is becoming simpler than ever with cutting-edge technology. However, with ease of service, it is also important to take care of the safety and security of bank accounts. While banks, for their part, continue to tighten safety measures, it is up to the individual bank account holder or the e-wallet user to maintain the security of one’s account.

Identity theft and internet fraud are highly prevalent in the modern age, so keeping your data safe is an important step to take when thinking about financial literacy. Nothing's wrong with online shopping, banking, and paying bills. That said, with the information that you exchange digitally, it is necessary to use caution. Change your passwords regularly and keep close track of all of your accounts.

Treat your card and bank data protected. Never share it in person with someone, as no bank asks for it. Be cautious to click on email links of any nature. Keep the contact details updated.

When handing out cards for swiping at any merchant establishment, be alert.

Becoming literate financially means educating yourself about your credit score.

A credit score is a number based on the information in your credit reports. Most credit scores range from 300 to 850, and where your score falls in this range represents your perceived credit risk. In other words, it tells potential lenders how likely you are to pay back what you borrow.

Your credit scores can affect whether a lender approves you for a mortgage, auto loan, personal loan, credit card, or another type of credit. And if you’re approved, your credit scores can also help determine the interest rate and terms you’re offered.

Different lenders use different credit scores. Regardless of the score used, making on-time payments, limiting new credit applications, maintaining a mix of credit cards and loans, and minimizing debt can help keep your credit in good shape.

Truly, it is never too early to start planning for retirement. In reality, you might be behind if you haven't started yet, but don't panic! While the thought of retirement can seem like a far-off dream, in order to ensure a better financial future, it is best to accept the principle of delayed gratification.

A lot of people get so overwhelmed about saving for an unknown future, that they end up not saving anything at all. Thankfully, planning for retirement is not overly onerous, but you will need a road map — one that can evolve over time — to keep you on track.

Thinking about what your life could look like in retirement is the first place to start. Look down and write down your retirement objectives with a pen and paper. 

While you should have some idea as to what you'll need to save per month based on your retirement goals, you also need to make sure that you have that money to save. It's a good idea to put retirement savings as a line item in your budget, just like food and shelter costs, so that you can set aside those funds every month.

Today, India is one of the biggest markets for businesses. Its large population is seen as an asset by Multinational Corporations. India has become a hub for Information and Communication Technology with Banglore seen as the Silicon Valley of India. There has been a steady increase in foreign investments and many Indian companies have expanded their operations to other countries. India is quickly emerging as one of the fastest-growing economies in the world. However, many small producers, companies, and Indian firms aren’t able to succeed. We have developed ourselves in technology and to some extent in production capacity, but most of the Indian businesses fail because of financial mismanagement. According to the 2011 census, 74.04% of the total population is literate, but only a few understand the importance of financial literacy.

(Source: S&P Global FinLit Survey by GFLEC)

According to the report conducted by the Global Financial Literacy Excellence Center, only 24% of the Indian adult population is financially literate. In comparison to other major emerging economies, the financial literacy rate of India is the lowest. This is due to inter-state disparities, lack of formal training, and awareness. While other emerging economies have better financial literacy rates, there’s still scope for more improvement.

Financial literacy is the doorway to effective human capital formation. Financial skills will help to raise the standard of living and contribute to overall growth. Our labor force combined with good financial education would help us in eradicating poverty to some extent. In short, a financially smart India would be a major force in the world.

Ultimately, it will make you feel more in charge, more educated, and less worried about money by improving basic financial literacy. But it's certainly worth a little time spent on. Financial terms will make your way or ruin it. They can shape entire economies. They can empower or weaken the capacity of a person to believe in a different future themselves.

It's hard to even begin to ask the right questions to help you assess your own valid financial course when you don't know what money-related means and look away. By staying unaware, you cannot build an impressive financial plan. Without great risk, you cannot even outsource the job to anyone else because you need to know at least enough to decide whether the individual in front of you knows their things.