Shrotri, Sonali Suresh. (2018). An Analysis of Financial Prudence of Youth in Formulating Higher Benefits. Unpublished. Ph.D., Education. Savitribai Phule Pune University, Pune.
1)
What is financial
literacy level of youth?
2)
Is there association
between financial literacy level and prudence of financial decisions?
3)
Is there association
between prudence of financial decisions and educational background?
4)
Is there association
between prudence of financial decisions and finance specialization?
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:
|
Sample Technique:
|
Method
of sampling selected is Quota Sampling with convenience sampling. The group
was of respondents between 18 years to 29 years of age. |
|
Geographical
Area:
|
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. |
|
Population:
|
For
the research work, population comprised of: people in the age group of 18
year to 29 year. |
|
Sample Unit:
|
Educated working individual in the age group 18 to
29 in Pune region. |
|
Sample Size:
|
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.
Table 1
Cronbach’s Alpha | N of Items |
0.899 | 59 |
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