A vital question to ask college students nowadays is whether or not they are thinking about money. Being curious, acquiring knowledge and discovering new things appear to be too foreign for schools or parents to care about nowadays, as education is centered only on employability. Students have been trained to judge themselves based on their academic achievements and marks in school, and after graduation, they are taught to judge themselves on their job and income.
What money concerns are likely to arise as soon as they start their first employment? They will undoubtedly feel powerful with money they can consider their own and the freedom to expend it anyway they see fitting. Many people would have already made their list of desires. They would have also begun getting advise on what to do with their money, where they should spend it, how much to save, and where to invest it. Let’s look at some big-ticket financial choices and the difficulties that they perceive in these choices.
Job or Higher education?
The first decision is to choose between a career and higher education. Indian parents are particularly identified for prioritising education. After prior generations abandoned their education and took up jobs to provide for big families, present generation parents want the greatest educational opportunities for their children. They advise their children to pursue further education immediately after graduation, or to gain some years of easy, basic job experience and utilise it to gain admission to MBA institutions for a Master’s degree.
However, today’s youth believe differently. They are publicly suspicious about the standard of education. They feel they will learn a great deal on their job. They are also hesitant to take out a loan or seek parental assistance since they feel obligated to save their own money while employed. As a result, youngsters nowadays prefer to work rather than continue their education.
The decision is primarily about the opportunities at work. To determine whether the work atmosphere is preferable to that of a regular college, one has to first go to work. If obtaining an extra qualification provides them with greater prospects, it may be worthwhile, but they cannot assess it till they first work.
Working as part of a team, cooperating rather than rivalling, being open to criticism, and being flexible regarding purpose and satisfaction on the job are all skills that may be developed over the course of time. Long-term focus is required for human capital, just as it is for financial ones. If young people move jobs too frequently, they will be trading with little investment. And if they stayed in a mediocre spot for too long, they’d be a buy-and-hold investor wishing for the best.
Establishing a long-term human capital necessitates weighing the trade-off between work and higher education, and to see which one will really add value. This can be accomplished better on the job, with further education as a near-term option to pursue, rather than doing it the other way around.
To get settled or to move around?
The second decision is, to be on the go or to settle down. Parents are too concerned about developmental benchmarks. They believe that getting the first job in a reputable company is sufficient to go and purchase a home, marry, and get settled in the traditional manner. This is not enticing to youngsters of current times. They do not want to be locked down to a specific spot too soon. They are not willing to sacrifice their goals, objectives, and ideals in order to fit in a life partner too quickly in their life. They also choose not to invest all of their savings in a single immovable building, which is an indivisible asset. Not everybody is nomadic in nature but young people like to be able to settle down organically.
This reluctance is understandable. It makes little sense to have compromises that affect the finances unless the work and income are solid and the career trajectory is obvious. The young might wait longer to settle down than their parents would like, but they are not interested in getting settled as soon as they acquire their first job.
Staying with parents or moving out:
The third decision is – whether to remain with parents or to go out. It is still common in many Indian homes for grown-up, working children to live with their parents. Mothers worry about what their 25-year-old child will eat; dads advise them of the significant savings that come from being together; and the current generation youngsters aren’t always ready to run the household autonomously and effectively.
While living together with their parents would save them money on groceries, rent, and utilities, not living within the boundaries of their finances is bad for first-time earners. Understanding to deploy money to various possibilities while keeping in mind that money is a finite resource is a valuable skill. When one has the option to learn something about personal finance, being financed by one’s parents is not a smart way to start. But my point of argument is not to advise youngsters that they should stay away from their parents once they get into a job. Of course it is our responsibility to take care of our parents when they are old. But predominantly, when youngsters enter into their first job, their parents are still working on nearing their retirement. So, they can leave aside their children to learn their first-hand personal finance lessons, and try to learn to live within their means.
Always it is (Income – Savings = Expenses):
Choosing a lifestyle that corresponds with one’s income level is the fourth decision. It is not unusual for young people to choose a lower-paying profession in a smaller city in order to achieve a superior work-life balance. It is priceless to be able to dedicate time outside of work to things that one loves about and enjoys. At the same time, it is not uncommon to see young earners battling with credit card debt or personal loan burden, having decided to live above their means and so falling into debt in the process. It requires experience, integrity, and tough decisions to spend sensibly and distribute money while considering the implications. This financial capability can only be learned by hands-on experience.
Final words:
There are several variations on the issue of how people perceive, control, and utilise money. At one end of the spectrum, new earners hurl money in order to win friends, get recognition, and feel virtuous. On the other hand, they become excessively self-centred and greedy. Balancing both these acts is a difficult personal finance decision, and for a lot of people, it is a struggle consisting of wins and losses. Being an employee for the first time is also a significant accomplishment to be proud of. The significant burden of choosing difficult decisions is firmly on the shoulders of the youth. Personal finance strategies and techniques can only be acquired, created, and shaped if one takes the time to think about the options and make well-educated choices.
