Financial Literacy a Necessary Antidote to Reckless Spending

India has world’s largest youth population. In four years from now i.e. 2020, average age of India’s population is predicted to be 29 years by Economic Survey 2015. Although it is a positive sign, but if we fail to direct / utilize their energy in right direction, it can have devastating economic effects.

Youths today are more independent than ever. They are less in influence of their parents but more by their peer group. They have exhibited signs of casual behavior with respect to spending. Credit cards have added fuel to the fire. Their reckless behavior in spending is making them soft targets for many online marketers offering products. So a question arises that are youths financially literate? Financial literacy is expected to make an individual prudent in financial decision making (Remund, 2010).

This triggers the need of policy makers to lay strong impetus on financial education for economic wellbeing of individual and hence of the country as whole. If interventions are not made to rectify the behavior of youths in financial decision making, it may lead to serious economic repercussions. Policy makers, while designing the plan for financial education, should keep in mind that financial education too decays with time like other education (Daniel et. al., 2014).

Plan for educating with respect to financial acumen should be in phased manner aligned with life cycle of an individual. This will help them implement the learning to practice on real time basis and in turn enroot the learning.

By Hitendra Lachhwani 

Assistant Professor of Finance, SKIPS

 

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