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, according to Visa’s 2012 Global Financial Literacy Barometer1
The results of the Barometer, which assessed and ranked the financial literacy levels of people in 28 markets, were released today. India emerged 23rd in the overall ranking and is just ahead of Morocco, South Africa and Vietnam.
The survey also found that the average savings set aside for an emergency among Indian respondents is 1.9 months – close to the survey average of 2.0 months. Respondents from China were the best at saving for an emergency with 3.9 months. It is followed by Taiwan (3.7 months), Hong Kong (3.5 months), Japan (3.3 months) and Canada (3.2 months). Indian women may not be taking steps to protect themselves, though – according to the Barometer, women (34 percent) were more likely than men (29 percent) not to have any savings at all.
Worryingly, Indian families do not frequently talk to their children about money management issues. On average, Indian respondents discuss budgeting, savings and responsible spending with their children just 10 days per year compared with the global average of 19 days per year. Despite this, Indians felt confident that teenagers and young adults are adequately prepared to manage their own finances. But the reality may not reflect that confidence: younger respondents (18-24 years old, 41 percent) were also more likely to have no emergency savings at all compared with older respondents (25-34 years old, 25 percent; 35-49 years old, 32 percent; and 50-64 years old, 33 percent).
Uttam Nayak, Group Country Manager, India and South Asia, Visa, said: “The Barometer clearly demonstrates that more needs to be done in advancing financial education in India especially among women and young people. To help them gain the necessary knowledge to make financial decisions, Visa is committed to providing the tools to equip people to become better money managers.”
When asked why families did not talk about financial issues, twice as many women (43 percent) than men (20 percent) said they did not understand personal money management issues well enough to discuss the subject with their family. However, almost all respondents (97 percent) agree that financial literacy is a topic meant for everyone and not just for wealthy families.
Global Financial Literacy Barometer: Key Findings
Brazil topped the Barometer findings, having the highest level of financial literacy, followed by Mexico, Australia, the United States and Canada. In Asia Pacific, Australia, New Zealand, Japan, Thailand and Malaysia make up the top five markets in this region.
Other Barometer findings include:
-- Across the globe, the youngest and oldest individuals surveyed are most at risk financially.
-- Income is not necessarily indicative of financial well being. Globally, 25 percent of respondents who report they don’t have enough funds to cover a personal economic emergency fall into high income categories.
-- Respondents in more than 28 markets surveyed believe that overall, teenagers and young adults do not understand money management basics, such as budgeting, saving, debt and spending responsibly.
-- The worldwide average age for schools to teach financial literacy is 11.3 years old.
Visa’s financial literacy programs teach people how to spend, save and budget responsibly. Visa believes that the most important financial tool is knowledge, and lessons learnt in money management will last a lifetime. Visa aims to provide financial literacy tools to 20 million people around the world by 2013.
A more detailed summary of the key findings of the Global Financial Literacy Barometer can be found at www.practicalmoneyskills.com/barometer
. For more information and comprehensive money management resources, log onto www.mymoneyskills.com
for tips on budgeting and saving, smart shopping, card security and much more.
About Visa Inc.:
Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com
1 Visa conducted the 2012 Global Financial Literacy Barometer survey between February and April of 2012 with 25,500 participants in 28 markets. In India, 923 participants between the ages of 18and 64 were surveyed through face-to-face interviews.