In today’s world of instant everything, the double increase of appetite for spending to the ratio of income is leading to many financial problems. The issue is more intense for the teens and young adults because they lack a formal education and the maturity in managing their finances and funds. And thus, in order to lead a stable and financially secured life, it is essential and crucial for the young adults to understand the importance of a financial education and its relevance. If you too fall in this category, read about the financial problems that you may encounter:
Financial Illiteracy: Personal finance is never or very rarely a part of the curriculum. Youngsters are often ill-prepared to tackle financial problems when fresh out of college, leading to poor financial planning. This in turn leads to decreased wealth and shooting debt. What one must know is, financial literacy doesn’t require innate skills and can be learned, a few minutes daily are enough.
Debt: It is one of the most abhorrent financial elements for the youth today. A desire for what you don’t have, and immediate attainment has become the second nature. People concentrate their debts to lead the good life, often beyond their means. It begins with some most manageable compromises. And really no one wants to end up in debt! Poor spending habits, sudden crises, and unplanned expenses are other things that drag you deeper into debt.
Financial Fragility –questions like what you’re going to do if you need Rs50,000 in cash immediately? Or how to pay for expenses after a freak accident? If you don’t have backup funds for such cases, then you are financially fragile. In a vicious cycle of financial crisis, a sudden expense may leave you deep in debt. Saving a little, a month can secure your financial future. Liquid mutual fund investments provide liquidity and short-term growth. For the long-term, a Fixed Deposits are recommended.
Increasing costs –Often parents recall their era of modest expenses. Young professionals often feel helpless in the face of the rising cost of living. Inflation has become a global phenomenon. Paychecks rarely grow proportionately. Savings has become a rare scene and you start living paycheck to paycheck.
High-paying jobs and multiple income resources can be helpful. Regular investments in financial schemes also help get an extra mileage out of your income. Youth tend to make poor financial decisions. Connect to a professional and start investing.
Conclusion: Though there is a lot of potential in the young generation of today but they do suffer due to their own set of challenges, lack of foresightedness and carelessness which they need to overcome. Crossing which they have a financially brighter future.