Why is most of the youth broke?

Nelson Mandela once said- ‘The youth of today are the leaders of tomorrow’. Constituting a sizable portion of the Indian population, the youth really is being regarded as the hope for a better future. But is the youth living up to these expectations?

Pay Day

This is how a typical month looks like for most of the youth today. Beginning of the month→ Paycheck received→ First 2 weeks: Household expenses, contingencies, dine outs, parties, shopping sprees→ Next two weeks: little money, scrambling to make ends meet, constant conversations with friends cancelling plans because they are broke.

Rest of the month

This cycle goes on for months no matter the amount of money we earn. Why is it that we are writing our own modern ‘riches to rags’ story?

Youth today is drowning in debt, have unstable jobs, little savings and low prospects. We are surviving paycheck-to-paycheck and are doing absolutely nothing to end this deed at its tracks. Our ‘living in the moment’ ideology seems to be not working well. With debts piling up and little or no idea about fighting this issue, the youth faces a grave concern in front of it. Let’s find out what it is that we are doing wrong and how we can rectify it.

 

Lack of financial literacy: There is an absence of financial education and hands-on training in our academic curriculum. Students studying business and commerce for five years have no idea how to file their tax returns. There is a lack of basic understanding about savings and debt management. This leads to making financial decisions at an impulse with little or no knowledge. There is a wide variety of options that are available in the market to help us maximise our money, but due to less knowledge, we fail to capitalise on those opportunities.

Short-sightedness: Most of the youth while on their quest of finding joy, clearly fails to look at the bigger picture. We need to understand that our decisions today will cause major consequences for tomorrow. Most of the youth have created a mirage of them living a happy, fulfilling life, but in reality, they are walking towards a never-ending cycle of debt. Student loan, car loan, house loan, education loan for kids. We fail to understand that savings and investments do not have to be a spoilsport in our life. Make some smart decisions and you will be able to save as well as spend your money on whatever you want.

Low sense of priorities: Most of us tend to lose sight of our priorities in the way of making an impression on others. We feel the need to maintain a flawed image in front of people even though it might inflict harm to our financial health. We are more worried about flaunting the latest iphone instead of investing that money in a mutual fund. Most of the youth fails to identify this mindless spending habit and usually adopts a defensive attitude towards it. We need to understand that two cups of coffee a day at Starbucks may add fuel to our brain but it burns a huge hole in our pockets.

Lack of initiative: Personal finance is still an uncomfortable and overwhelming topic for most of the youth. Keeping up with the plotline of any recent web-series seem to be a lot easier than following a recently enrolled financial literacy course. Even if someone wants to put their money into good use, they are not equipped with the required knowledge on how to optimise their hard-earned money. In other cases, we find people not bothered about their financial obligations at all. They somehow believe that they will be bailed out of their miseries by their parents whenever required. It has also been observed in various studies that discretionary spending on items such as alcohol, tobacco, narcotics, restaurants and spas have recorded a significant rise over the years. Again, living life on your terms is completely fine, but doing so at the risk of jeopardizing your future does not really seem to be a very wise decision. Nobody wants you to put a complete stop to your activities but having some sort of self-constraint is advisable.

What you do with your money today is going to shape your future. Understandably, we don’t want to live ten days in a month like a boss and then spend the rest of the nights losing sleep over our financial condition. What we save today will become our resources for a better tomorrow. Start today, it’s never too late.

 

Team Investoday