1) To understand the importance / benefits of financial education.
2) To determine the level of financial literacy among the youth.
3) To study the level of financial prudence in money management decisions among educated youth.
# Finance background # Non-finance background
4) To build a conceptual model of prudence in formulating higher benefits.
1) H0: There is higher level of financial literacy among youth.
H1: There is low level of financial literacy among youth.
2) H0: There is no relationship between financial literacy level and prudent decision making.
H1: There is relationship between financial literacy level and prudent decision making.
3) H0: There is no relationship between prudence of financial decision and educational background.
H1: There is relationship between prudence of financial decision and educational background.
4) H0: Relationship does not exist between prudence of financial decision and education with finance specialization.
H1: There exist relationship between prudence of financial decision and education with finance specialization.
Sampling Design Used for this Research Study:
Method of sampling selected is Quota Sampling with convenience sampling. The group was of respondents between 18 years to 29 years of age.
Pune region have been chosen for this research study. Pune region is chosen as Pune is known for its youth and for the same reason it is becoming the youth city in India. Education in Pune is some of the premium in India and has various types. Pune is named as “The Oxford of the East”, by Jawaharlal Nehru.
For the research work, population comprised of: people in the age group of 18 year to 29 year.
Educated working individual in the age group 18 to 29 in Pune region.
522 educated working individuals in the age group 18 to 29 in Pune region.
analytical and descriptive research.
The Statistical Package for the Social Sciences Incorporated (SPSS Inc.) version 23 has been used to statistically analyze the data collected in the survey with the help of bivariate data analysis techniques viz. –
Ø Correlation Analysis,
Ø Scatter Plot,
Ø Friedman Chi- square test
Ø Independent t-test
The reliability of survey is assessed using Cronbach’s Alpha.
N of Items
Source: Field data
Table 1 shows that the reliability for all the questions is 90%, which is highly acceptable alpha level showing the survey has good reliability
Financial prudence of working youth is found to be as low as 56% of the total respondents and have taken imprudent decisions. One third of the total respondents are near to prudent and only 11.3% of the total respondents are prudent.
It is found that financial prudence tend to increase along with financial literacy as they are positively correlated with (r=0.904). Highly financially literate person can take prudent decisions.
It is found that respondents’ with positive attitude, behaviour and high knowledge made prudent decisions and those with less knowledge, negative attitude and behaviour took imprudent decisions.
Out of total respondents who have scored high (i.e. score =>80%) in prudence, majority i.e. 45.7% respondents are in the age group “26-29”. But the highest number i.e. 45.7% of respondents are in the age group “22-25” who have taken near to prudent decisions (i.e. scored between 60% and 80%).
62.7% and 59% graduates have scored => 80% and =>60% respectively in financial prudence. These numbers are highest as compare to number of post-graduate and under graduate respondents who have scored => 80 and => 60%.
It is noted that out of total respondents’ 96.6% and 86.7% respondents are form educational background with finance specialization that have taken prudent and near to prudent decisions.
Half i.e. 50% of the total respondents are not prudent to debt. They borrow without thinking of their repayment capacity. It is found that respondents in the age group “18-21” have the highest number of debt imprudence and “22-25” age groups have the highest number of debt prudence.
It has been seen that 34.11% of total respondents do not save money at all. Though majority i.e. 65.89% of the respondents do save money, their saving to earnings ratio is not as per ideal saving ratio. It is found that respondents in the age group “18-21”have the highest number for 0% savings and respondents in the age group “22-25” have the highest number for 30% above saving.
Majority of working youth is not having investment prudence. It is found that 25% of total respondents actually invest in stock market but they don’t invest according to their objective. Amongst the three age groups, score of investment prudence is found to be the highest for the group “22-25”.
Near about two third of the respondents are enjoying credit card facilities without knowing consequences of non-payment or short payment of bills in time. In all, credit card imprudence is found in the age group “18-21” and “26-29”.
About half of the respondents do not feel the importance of early age saving for retirement. Many of those respondents do not even feel responsibility of their own retirement life. In all, the age group “26-29” has scored the highest in retirement planning amongst all the three groups.
1) Though it is a fact that youth is the backbone of a developed country, it is observed that majority of youth distracted and running away from studies. They don’t do right things till it is made mandatory. Therefore Universities should take initiatives and include this personal finance practical based subject mandatory like English language to all streams and profession courses such as engineering, law, pharmaceutical, medical, architecture, etc.
2) For current curriculums which can’t be changed soon, colleges should conduct seminars and workshops on practical based personal finance topics such as Stock market, banking, insurance, etc. for students of all the streams.
3) Colleges should take tests on personal finance matters and financial products on regular basis to make students aware about their poor knowledge and at the same time induce them to learn these things by telling them various benefits of personal finance knowledge through different means.
4) Colleges can conduct activities such as presentations, poster presentations, skits, mock-stock, group discussions, quiz, etc. on the topics of personal finance to increase awareness.
5) Stories may be told or videos may be shown of successful early age investors to encourage them for investing at early age and teach them about right investment choice and consequences of wrong one.
6) Colleges should have tie-up with NISM and provide financial education to students in the college campus through NISM courses.
7) Post Graduate Students having finance specialization should take initiative in spreading knowledge to other specialization students, under graduates and school students. They should organize small activities for these students to make them aware about financial instruments and their uses. They can spread awareness through ‘Financial Literacy Path Natya’ on roads, malls, school, colleges, etc.
8) Alike Government made it compulsory for every mahanagarpalika student to open account and get book donation and fee money through account, private schools and colleges should make it compulsory for every student to open bank account and pay fees, fine through account. This will give them exposure to open and handle their own account.
9) Education institutes and financial education training institutes should first segregate illiterates in different types of illiterates as suggested by S.S.Mundra which are as follows:
· Wise Illiterates- persons who knowingly submit to the financial scams,
· Greed Driven Illiterates – these persons are well-educated and aware about the risk involved in decisions taken by them,
· Information Deprived Illiterates – these persons are educated but less informed as they do not have access to the level of information that the service providers have,
· Illiterate Illiterates – these persons are new entrants of financial system and
· Kindergarten Illiterates – these are young school going children who are financially illiterates.
Then they should prepare financial education curriculum as per their requirements and provide them education through different means.
Keyword(s): Financial Prudence