According to the Organization for Economic Cooperation and Development (OECD) Financial Literacy is a combination of awareness, knowledge, skill, and outlook that is needed to make sound financial decisions and ultimately achieve individual financial wellbeing. For the Reserve Bank of India the job of financial literacy is to make us familiar with financial products, especially the rewards and risks associated with them for making choices that are informed by heart and spirit. In other words, we can say for being financially literate, it is very important that we become aware about the financial markets and its functioning. The two different types of the financial markets are the money market and the capital market. Former is used for short term borrowing and lending whereas the latter is used for the long term borrowing and lending or assets having the maturity of more than one year. Money is the basis of the financial markets (money and capital market). In every economic transaction, we need to make payments and money is the medium through which such payments take place. Hence, it is important for the economy on the whole. Financial literacy makes us able enough to make correct and effective decisions regarding money use and management (Noctor et al. 1992).
In order to survive in COVID-19 pandemic which has created different economic and financial crunches, it is important to have financial literacy. Many empirical research studies and reports at micro and macro level argue that COVID-19 worst affected economies of the world don't have a well-developed and well written financial plan for the reason that they consider it too complicated. In addition, they think it is very lengthy and hence don't pay enough time upon it. Moreover, these countries have trust deficit issues and communication gaps. They lack data sharing culture and knowledge disseminating culture as a result there is no one for trusted financial guidance. They must build partnerships with different financial literacy and awareness organizations to improve the financial literacy of their employees so that in times of contingencies and pandemics they won’t face financial problems. It is a financial dictum that all those organizations and bodies whose finance and human resource department have good tuning to meet the growing demand for financial markets give better returns in collaboration. What is required in this pandemic and bad financial time for donors, partnerships, and consortiums across the globe is to strive hard to support COVID-19 cause with the goal of dipping exposure, defeating transmission, contradicting misinformation and disinformation, shielding the vulnerable, reducing mortality and morbidity rates and increasing equitable access for all. All we need is solidarity from worthy and helpful individuals and organizations so that we can improve our living or quality of life.
Quality of life is the completeness of life, taking into account both physical and financial wellbeing. There is a direct and proportional relationship between physical and financial wellbeing. COVID-19 has increased the financial stress leading to the loss of efficiency levels. Also, it has caused untimely time offs alongside higher amounts of disturbances and distractions among workers. It is therefore mandatory to go for self-assessment and objective testing, two common ways of assessing financial levels of a country, because it will serve two purposes: On one hand, it will tell us where we stand and on another hand, it will measure our financial literacy. Moreover, it is very important to have a sound financial literacy model that will help in improving financial and economic health of the country.
A financial literacy model is good for handling any shock or disturbance in our economy. It can do wonders. It will improve financial literacy; improve efficiency level, lift employment satisfaction, and save on the health care costs which are very high nowadays keeping in view the on-going pandemic. We need to consult financial market experts who can help us establish a financial welfare platform coupled with modern digital resolutions. The rise of COVID-19 cases has witnessed the rise of self-service submissions or bids too and financial and economic e-learning approaches allowing suppliers to supply modified financial education in the best (smart) way.
Binish Qadri is Assistant Professor, Department of Economics, University of Kashmir.