According to a study conducted by life insurer HDFC Life and market research firm ValueNotes, youngsters in India (age group of 20-30 years) score low on financial awareness and planning. The study said that, the youngsters are not completely aware about the merits of goal-based planning.
The study does not highlight the complete absence of financial planning among youngsters.However, it said that they are not aligned appropriately with their financial goals as there is poor awareness about financial events. The awareness among these youngsters about events stood at 25.8 on a scale of 0-100 which indicates ‘extremely poor’. While knowledge and awareness about financial products scored 55.2 on a scale of 0-100.
They are more concerned about expected events, while their awareness on unexpected events is low. Among unexpected events, accident or illness (40%) is the top concern, whereas among macro-economic factors highest importance was given to government regulations (36%). These youngsters are also concerned about certain major responsibilities of their life. These include child’s education, health expenses and retirement. They are also concerned about meeting their lifestyle goals such as family vacations and purchase of durables into their financial plans.
The study pointed out that, 76% of youngsters have started planning for their future but most of them are aware that their plan is not comprehensive enough to cover their immediate and future financial needs. Only 14% of youngsters feel confident of their plans’ ability to cover them against all eventualities.Also, only a quarter of them have consulted financial planners, while the rest prefer to depend on their friends and family for advice.