Educated but financially illiterate: Reason to be poor

                                                                     “According to survey, 75% of educated Indians are financially illiterate.”

As shocking the above fact is, harder it is to accept it but as an individual do we really understand the difference between being literate and being financially literate? Almost 72% of all people think having a graduate or any equivalent degree make them fully literate.

What is it meant by being financially literate?

Financial literacy is the ability to understand how money works: how someone makes, manages and invests it, and also expends it to help others.

 In simple terms,

                                                                       “It’s not how much money you make, it’s how much money you keep”

Financial literacy is one of the most important aspects of an individual’s life as the future is dependent on the financial status of the individual. It is recommended to have some familiarity about the basic financial terms such as debit, credit, interest, EMI, financial ratios and Share Market to all irrespective of field they study or work in.

In India, more than half of the population are not aware about these terms until they are in high schools having chosen commerce background. The Quarter of the remaining population doesn’t even have access to the high schools thus they remain financially illiterate. These two reasons are few of the important factors to understand why majority of Indian demographics can be seen below poverty line or the middle class section.

Being educated is not enough!

In present times being only educated is not enough as financial expectations are growing on an exponential rate increasing expense column while the income is being constant or with a minimal increment.  In this tough and competitive environment if one is not aware or is financially illiterate cannot survive for long.

Educated people work for money while financially literate people make money work for them. This is the basic difference between the mentalities of the two groups. It is greatly dependent on the mentality of the individual that will it be poor or wealthy in coming future. For example, one has completed its engineering from a highly reputed college and is also placed with good salary but has no knowledge about investments, savings, PF etc. will always end up exhausting its salary at the end of the month but on the other hand an individual even with low income but good knowledge in financial aspects will always find a way to have savings, investments and still manages to better its standard of living.


In India, we have great education system which teaches us how to learn, compete and get most of our abilities but our financial education is delayed till the high school which is not even mandatory for all thus many youths opt out from the financial education leading to increased rate of financial illiteracy in the country which has become a major factor contributing in poverty of the country.

It is the high time to make our country not only educated but also financially literate to push the people above from the trap of poverty and help in the progress of the country and individual lives as well.

As it is rightly said,

                                                                 “A person can be highly educated, professionally successful, and financially illiterate.”

But the time has come to change this to,

                                                          “A person can be highly educated, professionally successful, and financially literate.”

Deepesh S Jain
PGDM 2020-22
Vivekanand Business School