More than 2000+ professionals across different industries with varied work experiences were studied to capture their current financial habits…
ArthaYantra, a Hyderabad based online financial advisory and wealth management company has come up with a survey of working professionals on their personal finance habits. This research by ArthaYantra is intended to analyse the current personal finance habits of the Salaried Professionals and the effect of such habits on their financial well-being in the future. More than 2000+ professionals across different industries with varied work experiences were studied to capture their current financial habits.
Surprisingly, the results shows that 97.57 per cent respondents in the 1-5 years experience category, 92.81 per cent respondents in the 6-10 years experience category and 88.52 per cent respondents in the 10+ years experience category would not be able to meet their financial goals. Although it is interesting to note that all the 3 groups of respondents have well defined Financial Goals which is related to their age & income groups as well, what is worrying is their readiness in terms of achieving their financial goals.
The personal finance readiness of salaried professionals defines the likelihood of meeting most of their goals in life. It defines:
- How efficiently the phase is going to be.
- How efficiently one can manage how the cash flows are being tracked.
- How well the investments are being planned.
- How comfortable the retirement plan can handle any unforeseen/unfortunate events in life.
These factors form the pillars of a strong financial foundation for salaried professionals from which they can reap long term benefits.Among the entry level professionals, the Personal Finance readiness is really low at 2.43 per cent. This is alarming because long-term investments when made over a long-term horizon, often yield very significant returns, keeping the power of compounding in mind. In the mid-career professionals, there is over-dependence on debts, with Personal Finance readiness only at 7.19 per cent. Generally the professionals in this segment aspire getting a home and also have the burden of child maintainance costs.
Only 11.48 per cent of the Senior Level professionals can be rated high on their personal finance readiness. Especially with high child education costs and other forms of debt like home loans in their name, these professionals should start managing their financials better. Unless the financial readiness increases from the current low levels, adverse economic or personal condition can negatively impact significant per centage of the professionals.
It is important that the working population needs to start saving soon. Their new saving rates have to increase. Saving money is an ardous and tough task and the only way it can be done is through discipline.