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Indians are under-invested when it comes to saving for emergencies and according to the global survey, over 70% Indian respondents can barely manage personal economic emergencies for three months
India is the third-largest growing economy of the world apart from being one of the highly preferred investment destinations. However, when it comes to financial literacy among Indians, results are quite dismal. A survey revealed that more than 70% of Indian respondents cannot manage their personal economic emergence for more than three months. Of course, poor financial planning is the key reason.
"Many people in India have set aside savings to weather a financial rainy day, but the lack of money management discussions in the family may set the stage for their children to struggle with finances," the 2012 edition of Visa Global Financial Literacy Barometer said.
Visa's survey, ranked Brazil as the most financially literate country among the 28 surveyed countries. It scored of 50.4 out of 100, while India 35 out of 100, and was positioned at 23rd, only ahead of countries like Morocco, South Africa and Vietnam.
Indian, according to the survey, also fared badly when it came to talking to children, ages 5-17, about money management issues. It stood 23rd with score of 19.6 out of 100, while nations like Mexico, Brazil and Serbia were positioned at the first three places. However results were surprising when it came to basic knowledge of money management among teenagers and young adults. Here, India stood at third position, only next to Vietnam and Indonesia.
Indian parents do not talk to their children on money management as frequently as they should, and the country averaged 10 days versus the global average of 19 days per year when it comes to discussion on budgeting, savings and responsible spending between parents and their wards.
Similarly, the survey which had 923 respondents between the ages 18 and 64 also found that Indians are under-invested when it comes to saving for emergencies.
The average savings set aside for an emergency among Indian respondents is 1.9 months versus China's 3.9 months and Taiwan's 3.7 months, it says.
On the gender front, the survey found 34% of Indian women do not have a saving account at all as compared to 29% for men.
According to the Visa Survey, age is an extremely relevant to survey findings and is clearly associated with risk. It found that the youngest and oldest individuals surveyed, across the globe, are most at risk. The survey also indicated that there is increase in respondents within the 35-49 age categories with regard to saving, financial well-being, and support for educating children about financial literacy.
Some of the other findings include that most countries outrank the US with regard to the amount of emphasis citizens believe the government and schools should put on economic education and financial literacy skills; and Chinese respondents were the best at saving, with an average of 3.9 months of expenses saved.
Visa's International Financial Literacy is aimed at gauging the strength and weaknesses of financial education worldwide in order to identify opportunities for improvement. The survey was conducted between February and April of 2012 with 25,500 participants from 28 countries.