Taking Ownership of the Future: Developing Practical Money Skills among the Youth in Emerging Economies

Abstract

Financial literacy is critical to the prosperity and well-being of people. The present research was undertaken in India to examine the level of financial literacy among the youth and to understand whether it is linked to any other variables. It attempts to arrive at a mean score of financial literacy by evaluating the knowledge of the respondents in five main subject areas of financial literacy with a series of fifty questions. It has used a comprehensive questionnaire designed to cover major aspects of personal financial prudence comprising multiple-choice questions. The researcher distributed the survey using stratified random sampling by age groupings that reflect the Mumbai youth population. A total of 875 respondents were selected for the study, out of which 679 completed and returned questionnaires that have finally been used for this study. This research shows that keeping personal financial records is very important as it makes one keep track of his/her various expenses and develop the qualities of a cautious spender. In order to store up enough money for future expenses such as higher education, buying a house/car, managing a family, etc., the young must develop a disciplined habit of managing their money.