World Savings Day
Intro…
With easier access to financialinformation and investment platforms, young earners approach money differentlythan previous generations. Financial experts explain changing savings habits,common mistakes, and why financial discipline matters
THE GOAN NETWORK
For most of us as children, everypenny we received went into the money box. But as this generation grows up andbegins earning, are those childhood habits still relevant, or are youngstersapproaching money differently? On the occasion of World Savings Day observedtoday, financial experts explain how saving habits are changing and what youngearners need to keep in mind.
From saving to investing
Priyanka Acharya, a financialeducator and founder of LaxmiGyaan® with over 17 years of experience, saysattitudes toward money have changed across generations. Earlier generationspreferred saving through land and gold, while later generations began exploringinvestments. “Since the previous generations were averse to risks, theypreferred to park their money in low-risk investments,” she says, adding thatsome who ventured into high-risk investments withdrew their money when economicconditions became uncertain. Young people between 18 and 30, however, are moreinformed and willing to explore investment options with the right guidance.
Anand Biswas, a SEBI-registeredInvestment Adviser, attributes this shift to easier access to financialinformation through the internet and social media, along with simplified accessto markets through systematic investment plans (SIPs) and digital KYC. “Thetraditional taboo around talking about and growing money seems to have gone,and there are definitely more open conversations, which is a good change,” hesays. Priorities have also changed, Acharya points out. Leaving wealth forfuture generations is no longer the only consideration, with many wanting toenjoy life as well.
Heena Contractor, Qualified PersonalFinance Professional and founder of Investsure Financial Services, saysyoungsters often begin investing with their first paycheque, unlike previousgenerations who started financial planning around milestones such as marriageand childbirth. “The focus has also shifted from retiring after 60 to FIRE(Financial Independence, Retire Early),” she remarks.
Easy access, limited understanding
Lee Ferrao, tax and businessconsultant at Lee Ferrao & Co, says preferences have shifted fromtraditional options such as fixed deposits and gold towards market-linkedinvestments. However, easier access does not always translate into financialunderstanding. “While youngsters now have easier access to investmentplatforms, some enter the market without fully understanding the risks involved,”he says. One common mistake, Ferrao says, is increasing expenditure as soon asincome rises. Expensive gadgets, lifestyle upgrades, credit card spending andunnecessary EMIs can leave little money for emergencies. These habits can alsomake it harder to build savings and meet longer-term financial goals,especially when young earners feel pressured to match the spending patterns oftheir peers.
Lifestyle spending eats into savings
The temptation of quick returns canprove costly, too. Mahesh Pai, proprietor of Mahesh Pai’s Financial Hub, sayssome young investors turn to futures and options (F&O) and cryptocurrencywithout fully understanding the risks. “Not every part of a portfolio needs tochase high returns,” he says, advising young earners to build an emergencyfund, secure adequate health and term insurance, set financial goals andunderstand an investment before committing money.
Quick returns, costly risks
Mohiet Hastwala, founder of FinsolInvestment Options, says youngsters are more aware of investment opportunitiesbut do not always know how to evaluate them. Some follow what others are doingwithout considering whether an investment suits their needs. He advisesfirst-time investors to consult a financial consultant and understand their optionsbefore investing. Biswas also cautions against relying on credit to fundexpensive gadgets, vacations and concerts. “A very expensive phone on a24-month EMI starts looking affordable when broken down into 24 instalments,”he says. He recommends seeking financial advice early to develop a plancovering insurance, asset allocation and emergency funds.
Resist peer pressure, plan wisely
While some youngsters are exploringstocks and mutual funds to build long-term wealth, goals such as locationflexibility and financial independence are taking precedence for many.Homeownership, once a major financial milestone, can seem increasingly unaffordable.At the same time, spending on expensive gadgets to signal financial success cancreate pressure to keep up with peers. Acharya advises young earners to guardagainst what she calls the three I’s: information overload, influence andimpulse. With financial opinions readily available online, she says people mustevaluate the information they follow rather than make decisions simply becauseothers are doing so.
“Every person would have a differentlifestyle. Everybody needs to respect that choices are different and thejourneys are different,” she says. She also cautions against taking personalloans for vacations or buying expensive phones to fit in. Financial decisionsshould reflect individual priorities rather than peer pressure. “Your worth isalways about the intelligence that you build and the insight that you have,”she says, encouraging young earners to focus on financial knowledge and assetcreation.
While easier access to investmentshas changed how youngsters approach money, awareness alone is not enough.Building financial security requires understanding risk, managing spending andmaking consistent decisions suited to individual needs. The habit of saving mayhave moved beyond the money box to investing in stocks, but the value of settingmoney aside and using it wisely remains unchanged.
