Skip to main content

Financial literacy among young people

THERE is a growing interest for financial literacy among young adults. In the last six months, I have had young graduates — most of whom who have taken up jobs to acquire work experience so that they can pursue a masters' degree later — asking me about financial planning. Also, there has been enthusiastic response from young BPO employees to workshops on managing money, organised mostly by their employers. Many think managing money is about learning the concepts, terminology and processes. Developing the right attitude towards money is perhaps precious at a young age, when people begin to deal with money they can call their own.

First, making decisions about money requires making sensible choices. It is about considering alternatives before deciding. Youngsters struggle with choices anyway — from the clothes they wear to the friends they make. They tend to be swayed by a number of external factors — peer pressure, fads and coolness quotient. Money choices need not mean stark rationality, but definitely require taking the time to make up one's mind, especially after considering one's specific situation. The ability to distance oneself and make a considered decision is a trait to be developed over time. Many grownups are unable to hold back the impulse when it comes to spending. It is important to hone the skill to not act in haste, but think through a decision. Keeping away from discount sales, last day offers, special prices, freebies and the likes is a good starting point. A good decision with money is made without being pushed into something in haste. Given the time, a good decision persists on merit and what could have been a bad impulsive decision fades off.

Second, given that money is a limited resource, allocation towards various needs is a tough challenge. All of us have memories of spending away our salaries too soon, and the painful wait for the next pay day. Making a budget may be an extreme case, but taking the time to make a mental allocation to key items that need money, and completing them first, is a good habit to develop. Without prioritisation, wasteful expenses take away most of the income, leaving too little for essentials. Borrowing from friends may not always be a palatable or available option.

Using the credit card only means spending the future income today. A mental allocation to various important needs and the ability to prioritize is another skill to develop. Using internet and mobile banking to set up auto debits for key payments, and ensuring these are completed before the money is available for other uses, is a good habit. It may be tiring to consider the money angle every time a spend presents itself, but mental budgets tend to bring about discipline over time and a control on ones finances.

Third, saving for the future is not something that crosses the mind of young first-time earners. There is a high level of confidence about the future and a fear of the unknown, is well, unknown. It is even seen as extremely conservative to set money aside. To save is to pay ourselves, from what we earn. But, it takes a while to develop that attitude. A good beginning point would be the ability to overcome the need for instant gratification. The emotional quotient needs to get better, so every need does not look like an immediate necessity to be fulfilled without delay. Living in a consumption age where spending is the new fad, this may be tough. But, the ability to postpone a desire is what would develop into the ability to save. Savings provides a much greater flexibility with money and enhances the choices one has in using money.

It would take a while to develop the right attitude to money, since much of it is shaped by one's upbringing and specific circumstances. But, it may be worthwhile to consider the independence that earning money brings in and to hone one's skills with money.

Popular posts from this blog

Axis Mutual Fund NFO - Axis Fixed Term Plan Series 18

Axis MF has announced that the NFO period of Axis Fixed Term Plan Series 18 (15 Months) under Axis Fixed Term Plan Series 17 19 has been preponded from February 27 to February 24.        --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 Reliance Tax Saver (ELSS) Fund IDFC Tax Advantage (ELSS) Fund SBI Magnum Tax Gain Schem...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

Franklin India Taxshield

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   This fund maintains a quality portfolio of large-cap orientation. The fund manager adheres to a bottom-up investment approach and looks for companies whose current market price does not reflect future growth prospects. Investments are in companies that can drive future earnings growth. Stocks are selected based on the company's financial strength, management's expertise, growth potential within the industry, and the industry's growth potential.   The portfolio is well-diversified across sectors and market capitalisation and follows a blend of value and growth style of investing. The fund follows a predominantly large-cap allocation of over 70 per cent, with small-cap allocation never exceeding 10 per cent since inception.   Performance The fund doesn't dev...

ELSS Funds for different Risk Profile

Match your Goals Risk Profile With ELSS Investment   DIFFERENT TRACKS Unlike funds with a clearly defined investment universe -- large-cap, mid-cap or multi-cap - Tax Saving Schemes do not specify investment focus If you are looking for an equity Linked Savings Scheme (ELSS) to pare your tax burden, the plethora of options may confuse you. Many investors simply opt for ELSS funds , also called tax saving schemes with the best return over a certain time period. However, this may not yield the best results. There are several types of ELSS funds and it requires a nuanced approach to pick the right one. DIFFERENT RISK PROFILES Unlike funds with a clearly defined investment universe -- large-cap, midcap or even multi-cap schemes in the ELSS category do not specify their investment focus. While these schemes have the flexibility to invest anywhere, most tend to follow a defined template. For instance, some funds take a distinct large-cap tilt with a limited exposure to mid or small-cap st...

Reliance Tax Saver Fund Online

Invest in Reliance Tax Saver Fund Online   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a mis...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now