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INTRODUCTION

Abstract
A very old Chinese proverb says, If you are planning for a year, sow rice; if you are
planning for a decade, plant trees; if you are planning for a lifetime, educate people.
There could not be a statement truer than this... and its truer when it comes to
financial education or financial literacy. This financial literacy comes through how
money could be earned? Spend? Save? In a country like India where income
standard is almost uncertain and leads to more consumption than saving which has
now been a central problem. If the saving is low, then the investment will also be low
leading to low capital formation. In this study we shall go through one of the aspect
of it which is saving. Saving motive is a desire to reserve certain portion of income
for future needs.

Introduction
Financing socio- economic activities in a country requires large amount of resources,
which is not possible to secure from taxation alone. It can be carried only through a
rise in the capital formation. In the opinion of L.G Whyte, the future welfare of any
country depends, to a great extent upon a high level of investment. This is possible
only by generation of an adequate volume of savings. Developing economies lay
great emphasis on the importance of domestic savings as they are the source of
investments to break the vicious circle of poverty and under development.

Saving is an important determinant of economic growth. Saving components can be

based on an individual or on household basis which proves to be the well being. As
for an individual savings becomes the cushion for the futures intercourse of the
unforeseen and upcoming as well as the uncertain circumstances of life. Saving is
the part of the income earned by the individuals.

Saving is all about the future, about anticipating and preparing for possible risks and
emergencies, preparing for upcoming events and expenditures, or starting a new
business, or expanding an existing one. Savings in these times has become all the
more important. Inflation, volatility in the equity and the commodities markets, and
economic turmoil has been so dramatic and quick that keeping pace with them could
be a nightmare.

In a developing economy in which there will be always surplus money available with
some sectors to the extent that the savings are tapped, the money available for
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circulation is taken away and to that extent pressure on prices and inflationary trend
is reduced. So therefore savings have got a very important role to play in the sphere
of economy.

Structure of Savings in India

In India domestic savings originate from three principal sectors namely: 1.
Household sector, 2. Private Corporate sector, and 3. Public sector. Here in this
study we consider only the household sector which comprises of individual, non-
corporate business and private collectives like temples, educational institutions and
charitable foundations. The saving can be held in the form of increases in (a) Liquid
assets like currency bank deposits and gold, (b) Financial assets like shares,
securities and insurance policies and physical assets.

Saving Habits of Young Parents

Most peoples daily life is focused on arranging finances for their immediate needs,
like paying their childrens school fee, arranging funds for next months EMI on a car
or home loan, buying clothing for the coming festive season, the list is endless. Its
not that they doesnt think about securing their future and achieving long- term goals,
but day- to day routine leaves them with little time to give their future a serious
thought.

Children and their right grooming is a task of highest priorities for every parent and
thoughts like only the best for my child are rather common. To turn these words into
realities one need to take step towards securing ones child future by providing
him/her the best. As parents one would never let money come in the way of ones
children and the fulfilment of their true potential. Financial provision by parents helps
build the corpus that allows their children to dream big and soar high.

However, in order to improve the quality of lives, parents need to take control of their
finances and the sooner they do it, the better. But a lot of people feel finance is too
scary and too complicated subject and hence tend to ignore it. Some people fear the
possibility of losing money, while others may not be comfortable with the risks
involved. However, the underlined facts remain the same: one has to be in control of
ones finances. Even among those who understand finance, some feel that just by
investing their money, they have done their job. They believe in some financial
product, property, gold, insurance, equity shares, mutual funds, or some other
avenue, will in itself accomplish their goals. But it doesnt work that way.

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In order to achieve financial objectives and meet ones goals, one needs to be
disciplined. Its not as tough as it sounds, but then neither is it a cake walk. What it
does require is a few adjustments to be made and delaying instant gratification.

Objectives for Savings

The following objectives of savings were considered while studying the saving habits
of young parents:

1. Family Affection
It is the natural love and affection for the family for which young parents save.
Every parent has some affection for his children and family members. To make them
enjoy life and to better their future prospects, they earns more and save more.

2. Precaution
Need for money arises at any time in the future. So people save in order to provide
for old age, disease, accident, unforeseen needs, emergencies, etc.

3. Standard of Living
A person may want to raise his standard of living which can be achieved only
through savings from his present income.

4. Farsightedness
Future is always uncertain. A farsighted person wants to make provision for
education, marriage, etc of his children.

5. Calculating Mind
Certain persons have a calculating mind and they want to increase their future
incomes, therefore they save out of their present incomes so as to earn more in
future by increasing the saved amount.

6. Speculation
Persons doing trade or business want to take the advantage of fluctuations in the
rate of interest. They save more if they expect a rise in the rate of interest in the near
future.

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7. Independent
Every man wants to be self sufficient or economically independent. He does not
want to borrow from anybody in case he needs money in the future.

8. Social Status
Only wealthy persons are respected in the present society. Everybody wants to enjoy
a higher social status.

9. Miserliness
There are people who save without any specific purpose. Miser persons save only to
satisfy their desire for wealth.

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 2. OBJECTIVES

Primary Objective:
To prepare a profile of young parents in Bharuch district with respect to their saving
habits.

Secondary Objective:
1.1 To know the proportion of regular vs. irregular saving by young parents

1.2 To know the frequency of savings by young parents

1.3 To know the percentage of savings made by young parents from their net
monthly / yearly income

1.4 To know the priority of objectives behind saving

1.5 To know the factors considered by young parents while saving

1.6 To know the preferred form of return by young parents

1.7 To know the preferred instruments for savings by young parents

1.8 To know the time horizon of financial planning

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 3. RESEARCH METHODOLOGY

Sampling Unit:
The sampling unit consisted of parents who have their eldest child of not more than
five years of age. The sample is taken from the Bharuch district of Gujarat state

Study Population:
Study population consists of parents from different societies of Bharuch district

Sampling Method:
The sampling method followed is non- probability, convenience sampling

Sample size:
Thirty respondents were approached out of which fifteen respondents were having
single income and rest fifteen were having double income.

Research Design:
Descriptive research design has been used in this study. This study will enable me to
describe the characteristics of young parents of Bharuch district.

Research Instrument:
A structured questionnaire fulfilling the objective of the research was prepared for the
purpose of survey. The questionnaire includes both close ended and open ended
questions.

Data Collection Method:

1. Primary data is collected since survey method is followed

2. Secondary data has been used for preparing questionnaire. Information was
collected from different sources such as through government periodicals, magazines,
website, journals, research papers, etc.

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Limitations of the study:
1. People may have personal bias towards particular investment option so that they
may not give correct information.

2. The time duration for the research is short, so a census is not possible due to time
limit, so I have collected data through sample survey.

3. The survey was limited only to the few societies of Bharuch district, so I cannot
know the opinion about saving habits of young parents from another region outside
this village.

4. I have collected data from 30 samples. For generalizing the results for the entire
population, a larger sample size would have been better.

5. Women working alone in a family has been excluded from the survey is the
limitation of the survey.

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 4. DATA ANALYSIS AND INTERPRETATION

T.1.1. Regularity of savings by young parents

Regularly/ Irregularly No. of respondents Percentag

e
Regularly 25 83
Irregularly 05 17
Total 30 100

From the above table it can be seen that 83% of respondents save regularly. It can
be interpreted from the above table that majority of young parents save regularly .

T.1.2. Frequency of savings by young parents

Frequency No. of respondents Percentage

Monthly 15 50
Quarterly 02 07
Half-yearly 09 30
Yearly 04 13
Total 30 100

From the above table it is seen that 50% of respondents prefer to save on a monthly
basis indicating regular saving habits. Monthly mode of savings is most preferred.
Next preferred mode of savings is half yearly.

T.1.3. Level of savings by young parents

Level of savings No. of respondents Percentage

<=10% 08 27
>10% <=20% 11 37
>20% <=30% 06 20
>30% 05 16

A majority of parents are able to save more than 10% up to 20% of their income.

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T.1.4 Objectives for savings by young parents

Objectives for 1 2 3 4 5 Rank Rank Percentag

savings/Rank score e
Family 14 13 13 06 09 352 01 24
Affection
Speculation 02 04 05 11 12 075 08 05
Precaution 11 15 41 18 05 279 03 19
Independent 05 04 05 21 20 118 04 08
Farsightednes 03 10 06 12 11 108 06 07
s
Social Status 04 08 04 16 14 110 05 07
Standard of 23 38 12 08 11 330 02 22
Living
Miserliness 02 04 03 04 03 46 09 03
Calculating 02 04 11 04 15 82 07 05
Mind

Objectives of savings
FAMILY AFFECTION
SPECULATION
PRECAUTION
3% 5%
24% INDEPENDENT
22%
FARSIGHTEDNESS
5%
7% SOCIAL STATUS
7% 19% STANDARD OF LIVING
8%
MISERLINESS
CALCULATING MIND

It is seen from the above table and pie-chart that young parents give top most priority
to family affection, standard of living and precaution. Moderate priority is given to

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independence, farsightedness and social status. Least priority is given to
Miserliness, Speculation and calculating mind.

T.1.5 Factors considered by young parents

1 2 3 4 Rank Rank Percentag

score e
Liquidity 05 04 02 26 62 6 06
Safety 44 21 19 08 285 1 29
Maturity 04 09 07 25 82 5 08
Taxation 22 19 32 18 227 3 23
Marketabilit 06 13 12 13 100 4 10
y
Returns 19 34 28 10 244 2 24

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 Consideration while saving

6% Liquidity
24%
Safety
29%
Maturity
10% Taxation
Marketability
8%
23% Returns

Young parents consider safety of investment to be most important. Second and third
priority is given to taxation and returns respectively. Least priority is given to the
liquidity, maturity and marketability.

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T.1.6 Forms of return preferred by young parents

Form of return No. of respondents Percentage

Dividend/ Interest 18 60
Capital 12 40
Appreciation

Young parents show higher preference for dividend or interest than capital
appreciation

T.1.7 Proportion of investment while savings in different financial

and physical assets as per survey

Instruments 1 2 3 4 5 Rank score Rank

Postal saving 07 04 04 04 03 74 8
Bank Deposits 58 14 09 05 07 390 1
Insurance 03 06 28 34 11 202 3
Mutual Fund 08 06 02 04 10 88 7
Real Estate 05 07 10 18 42 161 4
Share Market 01 14 17 09 06 136 5
Employee 04 11 09 12 10 125 6
Provident Fund
Public 01 01 02 04 01 24 9
Provident Fund
Jewellery 13 37 19 10 10 300 2
( Gold, Silver,
etc)

The three most popular investment avenues for young parents are bank deposits,
jewellery and insurance. The least preferred investment avenues are public
provident fund, postal saving, and mutual fund.

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T.1.8 Time horizon for financial planning by young parents

Time horizon for financial planning No. of respondents Percentag

e
<5 years 05 17
5 10 years 10 33
11 15 years 12 40
>15 03 10
Total 30 100

The top two priorities for financial planning are 5 10 years and 11 15 years
respectively for young parents. This indicates that young parents prefer to plan on
long term basis.

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 5. FINDINGS

Profile of young parents in Bharuch district w.r.t their saving habits

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6. CONCLUSION

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Saving is normal human psychology of securing the uncertain future. Parents
especially have a dual consideration of securing their own as well as their childrens
future in terms of their career and settling down in life.

As per our two objectives certain conclusion are drawn which are as follows:

The profile of young parents can be designed in exclusive way that the young
parents preferred regular saving; most of them want to save on monthly basis
indicating they save regularly. It is seen based on the survey that most them
preferred to save due to family affection, standard of living and precaution.
Consideration of young parents is high with respect to safety, taxation and return.
Proportion of investment is most in the case of bank deposits, returns and jewellery.

This research studies savings habits of young parents w.r.t relevant attributes,
attitudes, lifestyle, and their perception. I learnt many things while I was conducting
the survey like the attitudes, beliefs, opinions, preferences, socio- economic factors,
cultural factors, personal factors, etc. which may affect the saving pattern favourably
or unfavourably.

Saving is an on- going process because people have unlimited desire/wants and
these wants never comes to end. The fulfilment of one will give birth to another so in
order to accomplish ones goal and to survive in this age of competition there is a
constant need to save for children.

7. RECOMMENDATION

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1. Further the researcher could involve regarding the analysis of the factors affecting
the investment avenues and also regarding the investment more in the physical
assets.

2. The institutional can aware more the young parents about the benefits of Public
Provident Fund, Mutual Fund and as the young parents are mostly interested in long
term plans so institutions can aware them to use their finance accordingly.

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