How can Gen Z optimise its financial plans for a better future?

“If 20ies will not be considered the new 30ies, Gen Z will lose the opportunity in upgrading their family lifestyle; have financial stability and more importantly convert their dreams into reality,” emphasises Shikha Mittal, Founder, Be.artsy and Be Your Own Shakti.  Be.artsy also has a flagship financial literacy course ‘Be Your Own Lakshmi’ aka BYOL, exclusively curated for  Indian women to impart them with financial knowledge. 

The shepreneur further mentions, “India is the talk of the town in being an economic superpower in the coming decade, which implies an increase in purchasing power but also, an opportunity to make money out of money. Using the power of money lies in the hands of acquiring unbiased financial literacy that will make every Indian an active taxpayer with increased individual and family wealth. It’s possible when GenZ, especially the ones doing graduation and post-graduation take the matters in hand and actively upskill their knowledge of savings, investments, borrowing, lending, insurance and digital scams and frauds.”

Thus, it brings utmost importance to the fact that financial literacy is the need of the hour, especially among young college students. It plays a vital role in equipping youngsters with the knowledge and skills necessary to make informed financial decisions. It empowers them to navigate the complexities of personal finance, build a strong foundation for their future, and avoid common pitfalls that can lead to financial difficulties. 

Acknowledging the above-mentioned perspective, Rohan Mahajan, a 2nd-year MBA student with Apeejay Institute of Management & Engineering Technical in Jalandhar says, “In today’s complex and ever-changing economic landscape, financial literacy has become a crucial skill for college students. Understanding personal finance empowers students to make informed decisions and manage their money effectively. With the rising costs of education and the burden of student loans, financial literacy helps students navigate their financial responsibilities, develop healthy spending habits, and plan for their future.” 

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Moreover, inculcating the habit of budgeting and money management will enable students to effectively manage their income, expenses, and debt. It instills discipline and responsibility in handling money thereby fostering financial stability. “Financial literacy equips students with knowledge about budgeting, saving, investing, and debt management, enabling them to avoid common financial pitfalls and build a strong foundation for long-term financial well-being. By promoting financial literacy, we empower college students to take control of their financial future and achieve financial independence,” opines Mahajan.

So, let’s look at 5 simple habits students must nurture to build a financially secure future:

Educate yourself: Start by seeking out resources on personal finance. Read books, attend workshops, and explore online platforms that provide reliable financial information. Stay updated on financial news and trends to develop a comprehensive understanding of financial concepts.

Create a budget: Establish a budget to track income and expenses. Identify necessary expenses such as tuition, rent, and utilities, and allocate funds for savings and discretionary spending. Regularly review and adjust your budget to ensure financial stability and responsible money management.

Build an emergency fund: Start saving for emergencies to create a safety net for unexpected expenses. Set aside a portion of your income each month into a separate account specifically designated for emergencies. Aim to save three to six months’ worth of living expenses.

Manage debt wisely: If you have student loans or credit card debt, develop a plan for repayment. Understand the terms, interest rates, and repayment options available to you. Prioritize paying off high-interest debt and consider seeking advice from financial aid offices or loan counselors.

Invest for the future: Learn about investment options such as stocks, bonds, mutual funds, and retirement accounts. Consider consulting with a financial advisor to assess your risk tolerance and develop an investment strategy aligned with your financial goals and timeline.

Thus, it’s true that financial literacy is a critical skill that empowers college students to make informed financial decisions. And moreover, by developing these habits early on not only equips students for the challenges they may face in their academic journey, but also sets them on a path towards long-term financial security and independence.