Financial wellness is easily one of the most ignored yet important topics in our lives. Over 67% of the Indians lack financial literacy and have no access to formal credit. However, they are likely to approach loan sharks for a hand loan, exposing them to cycles of debt.
A key to breaking the debt cycles is by introducing a program that combines access to formal credit with financial inclusion and financial literacy -which works best for financial wellness.
The importance of financial wellness is felt even more when we see advertisements on social media for financial literacy courses, targeting children.
Why target the young? In recent years, what used to once be the specialty of financial trainers has now been a focus for Fintechs in educating people about managing their money better. This in turn has opened up opportunities for new age educators to build financial literacy programs with children and youth as they are the users of future technologies on which platforms are built.
The online platforms expand financial inclusion so everyone gets easy access to formal credit and affordable products to start their journey towards financial wellness.
Financial wellness cannot be created overnight though. Instead, individuals need to take small steps towards building one. Companies that implement employee benefit programs with focus on financial wellness have a huge opportunity to create awareness about service providers, educate employees about safety of online platforms and hand hold them in developing financial discipline to secure their future.
Today, there are digital wellness platforms that quickly integrate with corporate HR systems via APIs to deliver various benefits to employees.
For starters, here are some quick hacks on building a personal financial wellness plan:
- As a first step, open a bank account. Having a bank account can help you in multiple ways. It can help you access formal credit in the long run; it can enable digital transactions through smart and secure mobile apps and help you to transact in a safe way.
- Use a mobile application to digitally track your financial activities and create a budget for household expenditures, children’s education, savings, and emergencies. This will help you curtail unwanted expenses and set money aside for emergencies. This will help put money to better and mindful use.
- Start a small savings scheme to inculcate the habit of saving. With as low as Rs.3-4/day you can invest in various savings options such as mutual funds SIPs and digital gold. Women in particular manage the household budget and are often eager to start home-based businesses. When armed with financial literacy tools, women entrepreneurs can make a remarkable impact on their families and communities. Today fintech platforms offer saving options from as low as Rs.100 (about Rs.3/day) - resonating with the small savings in kitchen containers from earlier days.
- Apply for a small loan through authentic fintechs partnered with only RBI regulated entities. Your on-time loan EMI repayments will help you improve your credit score and make you eligible for more/ bigger loans. Use loans for your important needs such as income generation, tuition fees, unexpected health issues etc. Avoid taking loans for avoidable expenses.
- Get adequate medical coverage to protect your family from unexpected illness and expenses associated with its treatment. The insurance industry has introduced a number of health coverage options that are both cost effective as well as specific to your medical needs. Example: You can use Super Top Up insurance to get additional coverage on your existing cover, Hospicash to avail daily cash in lump sum during hospitalization or critical illness insurance to get your loved ones the timely treatment they deserve.
- Use secure digital apps to pay bills and make on time payments to avoid penalties, fees or other extra charges.
- Keep track of various government benefit schemes that aid people of low income groups to have a bank account, pension scheme, insurances such as personal accident insurance and better interest rates on deposits for senior citizens.
Individuals require first having a basic understanding of the available tools and knowing the importance of money management to start their journey on financial wellness.
Employers, on the other hand, when implementing financial wellness programs need to be aware that it cannot be uniform for all but have to be personalized to individual needs.
Having a program with curated solutions using data driven technology will help workforces enjoy a ready to use solution to begin their financial wellness plan.
Monish Anand is the CEO & Founder at MyShubhLife