2nd component of financial literacy!

The second component of Financial Literacy is Financial Behavior. Financial behavior is how you manage your household budgets or budgeting, yours saving behavior, how you manage cost of living and how you evaluate options while selecting different financial products for investments. This is more personal finance. Here one can start with knowing the basic 50-30-20 rule. 50% of your income should go towards necessary expenses like grocery, rent, utility bills, etc. 30% of your income can go towards non-essential expenses which are discretionary in nature but make your standard of living better like consumer durables, eating out, entertainment like movies, fashion shopping etc. And 20% of your income should go towards paying your debt (home or personal loan) and also adding to your savings for investments. Investing your surplus savings in different quality asset classes to create a corpus is directly linked to your knowledge about finance which is the first component of financial literacy. It is simple you cannot invest if you have no knowledge of financial concepts.