Challenging and disruptive as Covid-19 has been, it is also shaping behaviours towards personal finance, reveals the findings of a Scripbox survey that aims to understand investor behaviour and sentiment.
Conducted ahead of World Savings Day (celebrated globally on October 31st), Scripbox, a leading digital wealth manager, aims to create awareness on the importance of saving and investing that can create a virtuous circle with lifelong benefits.
More than 80 per cent of the respondents surveyed say that Covid-19 has been a wake-up call for them, to get their finances in order and to course-correct for better financial health. One in three respondents says that the biggest stressor during Covid-19 has been financial health and well-being, ahead of physical health and relationships.
Both men and women acknowledge the role of the pandemic in it had changed their behaviour vis-à-vis saving and investing. 28 per cent of women respondents say they are smarter investors today than before the pandemic, compared to 26 per cent of men respondents, who assessed themselves similarly.
The positive behavioural change with personal finance is evident in the actions that survey respondents are taking. 51 per cent have started to save more than before, while 36 per cent of respondents are investing more in wealth creation to improve their financial health. Women are complementing their increased savings with reduced discretionary spending, an action backed by 29 per cent of women respondents. 20 per cent say they have a financial plan in place to meet their personal goals, while 15 per cent of respondents say they are seeking professional help with investment decisions.
Given the uncertainty, Indians are preferring to keep excess money in their savings accounts or in Fixed Deposits, followed by investing in Mutual Funds. 53 per cent of survey respondents park their excess money in a savings account while 41 per cent say they put it in a fixed deposit or a recurring deposit. 37 per cent of respondents prefer mutual funds as their number one investment choice, followed by stocks (24 per cent), Gold (24 percent), Cryptocurrency (14 per cent) and buying property (14 per cent).
Creating an emergency fund emerges as the top financial goal in the current environment across genders. While 34 per cent of men picked healthcare as their next important financial goal, 38 per cent of women would prefer to set aside money for children’s education. Buying a home was among the top financial goals of 29 per cent of respondents.
As Indians re-evaluate their financial circumstances and re-commit to saving, hindsight is 20/20. 56 per cent of respondents say they would like to advise their younger selves to start investing as early as possible in life.
Atul Shinghal, Founder and CEO at Scripbox, said thefindings of this survey are profound and encouraging. Just like the use of digital is a new habit acquired by many during the pandemic, financial behaviour has also transformed with a preference for digital interactions and this uptick in the use of digital services is here to stay.
“Our survey respondents confirm that alongside saving more and investing for wealth creation, reducing discretionary spending and creating an emergency fund are what they are paying more attention to, to be better prepared in the new normal. In addition, while traditional means of saving are still popular, it is heartening to see an increased preference for robust investment options like mutual funds over-trading. It’s about being in control and that confidence of being in charge, helps to create a greater sense of well-being,” he said.
“As the ongoing crisis makes people more aware of the importance of active financial management, a personalised financial planning approach that delivers on long-term goals, rather than on selling specific products will be the opportunity to connect with a highly engaged audience. Scripbox, optimally combines technology and human advice and guidance, to help make informed decisions that empower investors to pursue their best financial lives,” Shinghal added.
Scripbox is India’s pioneering digital wealth manager. Founded in 2012, it is recognised for creating simple and elegant user experiences in a complex domain. Scripbox uses proprietary algorithms to deliver a full stack of wealth management solutions - from US Equities and Insurance to holistic portfolio construction and financial advisers.