23 Per Cent Salaried Employees Not Prepared For Emergencies, Lack Financial Planning: Report

According to a survey, 48 per cent of the respondents identified that planning for financial goals was their most significant financial challenge.

Lack of financial planning continues to be one of the biggest challenges faced by salaried Indians. A MoneyControl report citing a survey of salaried employees said that Indians lack financial planning. According to the report, the salaried class tends to rely solely on employer benefits and is unsure if they are planning correctly for their goals.

The report cites a survey by Finsafe India, a financial education company. It was conducted among 1,364 salaried employees. According to a survey, 48 per cent of the respondents identified that planning for financial goals was their most significant financial challenge, while 42 per cent said they would not be able to cover their expenses if they became unemployed.

Supporting elderly parents and paying for medical expenses were bigger financial worries than not being able to repay loans, especially credit card debt. According to the survey, 48 per cent of those who participated stated that they depended on medical insurance provided by their employer, but they were uncertain if it would be sufficient. In addition, 23 per cent of the respondents were not equipped to handle medical emergencies at all.

In terms of investment, investing in equities was the choice of 44 per cent of the surveyed individuals, whereas 36 per cent preferred debt investments such as fixed deposits and insurance policies. About one-third (34 per cent) of respondents did not invest because they were unsure where to invest, the report said. 

Respondents expressed a desire to expand their knowledge of financial planning, mutual funds, and taxation, the survey noted. However, saving money was identified as a significant obstacle for many individuals. Among those surveyed, 57 per cent saved less than 20 per cent of their take-home salary, while 24 per cent did not save at all. Factors that contributed to low savings included lifestyle expenses, large loans, and a lack of focus on saving.

The report also noted that despite the widespread availability of mutual funds and the popularity of Systematic Investment Plans (SIPs), investors are still allocating a low portion of their overall portfolio toward these funds. Younger investors tend to prioritize high-yielding but high-risk products such as P2P lending, non-convertible debentures (NCDs), and stock baskets.

The start of the financial year is a good time to assess finances. A financial plan is crucial to manage finances and achieve goals. It provides behavioral discipline and guidance.