The expenditure-oriented youth of today don’t know what to do with the money they get— what to buy with it, how much to save and how much to invest. So they do what seems best—blow it all up.
They can’t entirely be blamed. Access to information about personal finance is still very low. By the time the young are comfortable about some instruments and products, they have lost four to five years with the potential of handsome returns. It is here that companies can play a big role in educating the young about managing their incomes. Many are already outsourcing consultancy to organisations that look after HR-related issues. Though it should be carefully thought out, companies can also make investment mandatory for employees.
Many youngsters seem unaware of simple facts like the tax deduction limit under Section 80C and which type of instruments enjoy them. Most of them are risk averse and stay away from the stock markets because of parental hangover or lack of proper knowledge
Interestingly, the self-employed youngsters have the highest inclination towards investment. Those with a business background, especially the youth of Gujarat and Mumbai seem more aware of finance issues. Perhaps this is because finance is not only a topic of conversation in the workplace but also in their homes.
The best way to improve the financial literacy of the young earners of today is to create an environment where it is more frequently discussed. As the work culture of the country becomes more competitive and job security declines, financial management will soon be indispensable to all future planning.
(By Sampath Shetty, Vice-President, TeamLease)
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