The survey by Scripbox, a digital wealth management service provider, was conducted in July among more than 1,400 adult Indians to assess their financial preparedness to achieve freedom from financial worries.
Of the respondents, 83 per cent were men and 17 per cent women.
According to the Scripbox’s Financial Freedom Survey 2020, 50 per cent of respondents plan to remove discretionary spending and save more for an emergency.
It, further, said 28 per cent will cut back on non-essentials, 22 per cent will save to have a financial corpus to dip into during an emergency and 10 per cent said that they will reduce their EMI burden.
“It’s a time of financial unease. Nearly one in every two Indian (45 per cent) is uncertain of the state of the economy and is bracing for at least a year of slow growth,” the survey said.
Among all respondents, nearly 44 per cent are servicing an EMI that is 15 to 30 per cent of their monthly income, while 11 per cent have an EMI debt burden of over 50 per cent of their monthly income.
The COVID-19 pandemic has spurred Indians to take financial action to save more and to channel these savings into growing their wealth, the survey revealed.
The survey found that 28 per cent intend to start with having a financial plan in place to grow their wealth, 23 per cent will build a financial corpus for an emergency and 18 per cent intend to save for retirement.
Children’s education and buying a house were prioritised by just 10 per cent respondents, it added.
Moreover, 50 per cent respondents intend to get external help with financial planning.
“While the pandemic has had an impact on the economy, the survey points to Indians becoming more aware of the need for financial planning. The desire to take action on growing their wealth also bodes well for the India growth story,” said Atul Shinghal, founder and CEO of Scripbox.
While one in every two Indians understand the concept of financial freedom, a majority (70 per cent) of respondents are unsure of how to achieve it.
Moreover, women (75 per cent) are less confident than men (67 per cent) in being able to achieve financial freedom.
With the pandemic having brought personal financial matters under the lens, more respondents realise the limitations of their current investment strategies.
The respondents also acknowledged their most common financial mistake.
The top five mistakes are investing without having a defined long-term goal (39 per cent), poor savings (18 per cent), not enough investments that offer liquidity (15 per cent), mixing life insurance and investments (15 per cent) and investing in exotic financial products with poor returns (10 per cent).