Friends of finance

Taking a more pragmatic approach, embracing the savings culture and spending prudently,  Gen Z is winning big, finds Vaishali Vijaykumar
illustration: tapas ranjan
illustration: tapas ranjan

CHENNAI: We live in a world run by money. Credit card bills, bank loans, investment schemes, and financial planning are an inevitable part of our lives. Every generation — from boomers to millennials and Gen Z — has its set of economic challenges that have shaped the financial habits of the generation. CE talks to students, a money blogger, financial consultant and chartered accountant to make Gen Z financially prudent. 

Money management 
With a plethora of information about money-saving tips on the Internet, is Gen Z better educated than the previous generation? City-based writer and blogger Lavanya Mohan says, “I don’t think there’s any major difference in terms of financial awareness between the millennials and Gen Z. If anything, Gen Z seem to be more eager to learn about fixing or organising their finances than millennials were during early adulthood. Consulting a professional is the best way to go for advice, however, when it comes to learning, it makes the most sense to refer to trusted news publications versus social media, where there’s a lot of noise.” 

Lavanya writes on money management and investments on her blog Penn Money. She grew up in a household that constantly talked about money and how it can be saved. The children in her family were always welcome to participate in the conversation and ask questions. Her mother, a homemaker, was part of all of her father’s financial decisions. “Watching the women of the household take part as equals in money matters can be a powerful example for children. Assuming that finance is impossible to understand or that it requires special skill to understand is wrong. It’s not. The more we talk about it, the easier it becomes to understand,” says Lavanya, suggesting young adults and students to start a recurring bank deposit (RD account) as it is a great way to start inculcating financial discipline. 

How early is too early?
Everyone’s background, goals and abilities determine how they handle money and their saving patterns. Deloitte’s Eighth Annual Millennial survey in 2019 projected that the Indian millennials and Gen Z is in a better spot than their global peers. The report was based on a sample size of 1,316 millennials from 42 countries and 3,009 Gen Z kids from 10 countries. The sample size for the Indian market was 300 each — from millennials and Gen Z.  Youngsters like Suhan Vidyan and Shreya Vani are seemingly fine examples of financial prudence. Suhan’s father opened a bank account for him and gave him a debit card when he turned 18.

 “I show my monthly account statements to my father and he gives me feedback on where to improve. I read newspapers regularly and filter the basic information necessary for saving. I inculcated this habit as a child, when I started purchasing grocery for my mother. Handling money teaches you accountability and responsibility. I draw a line between what’s worth spending, guilty pleasures and savings. Some of my friends also discuss their finances with me,” says the ECE student from VIT, Chennai.

While some children have innate skills of management, some learn from experience. Shreya lived all her life away from her parents, first in a boarding school and later during college. As a kid, she was given `50 as pocket money, once in three months. During vacations, when she visited home, she’d go on a shopping spree. “My dad gave me a credit card when I joined college. I kept swiping it often and one day he sat me down and asked me to think about the expenses. It dawned on me that I’ve splurged money unwantedly. Now I’m working and I make sure I manage my expenses within the budget and compromise on luxury. Staying alone and getting a job has taught me more,” shares the 22-year-old. 

The way forward
In the age of social media, with multiple money monitoring and spending tracker apps, research and groundwork alone can fetch authentic information. “Impulse-buying is common among kids  of this generation. With resources at hand, they have more freedom than earlier generations. Likewise, they also have accessibility to information that they can use wisely. Budgeting and allocating resources is the best way to do it. One must have basic ideas about the inflation rate and market values,” details Nithya Sankaran, a charted accountant, and partner at CRBS, an audit firm. She opines that parents must have these discussions with children at a young age when they can assimilate information and logically think.
Is it necessary to take professional help? Is this the right time to talk about finance? Should I burden my child with pressures?  

These are some of the common questions that cloud parents’ minds. The trend of taking advice from professionals is picking up  so as to not fall prey to social media advice. Balajee BR, founder and director, Bottomline Solutions and Services shares his perspective on decision-making skills. “Ask yourself three questions — what do I need? Why do I need it? What do I do? Parents must open up on money matters before kids start raising questions. Most of them don’t get access to the right source of financial help.

There’s a lot of unsolicited information and the quality of knowledge is missing. If parents are going to think ‘my child should get what I did not’, then it will become difficult to later correct their habits and behaviours. Start a few saving habits and later integrate it with investment plans. The ultimate goal is wealth creation,” says Balajee, who gives a piggy bank to all his clients. Talking finance is still considered a ‘not-so-cool’ subject for most of the children. With healthy discussions at home and the right guidance, Gen Z can build a secure future. You only live once, so live it penny-wise! 

Part of the conversation
Lavanya grew up in a household that constantly talked about money and how it can be saved. The children in her family were always welcome to participate in the conversation and ask questions. Her mother, a homemaker, was part of all of her father’s financial decisions.

Lavanya Mohan suggests a few financial blogs and apps

The Financial Diet Blog [thefinancialdiet.com]
Personal Finances Classes by Pay It Forward [https://www.payitforward.net.in/] 
Let’s Talk Money by Monika Halan
Zerodha Varsity App
Fudget app: a great way to start learning how to budget
Dollarbird: another great budgeting app

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