This year’s Aspiration Index has revealed where India’s financial priorities lie, but it has also thrown up its share of surprises.
The 2019 Aspiration Index is out. It is a survey of India’s aspirations seen through the lens of personal finance. This year’s study has told us where India’s financial priorities lie—but it has also thrown up its share of surprises.
In its second year, the Aspiration Index studied over 1,800 men and women between the ages 22-45 in 12 Indian cities. It asked them questions on the six main pillars of aspiration—Health, Wealth, Fame, Personal Growth, Relationships, and Image. These six were further broken down into 25 goals. These range from “buying a home” as a Wealth goal, “owning a premium vehicle” as an Image goal, or “to have long-lasting friendships” as a Relationship goal. The objective: to find out which goals matter the most to Indians, how likely they are to achieve those goals, and how far they’ve already worked on attaining those goals.
Here’s a quick look at the highlights of the study:
Non-Metros Have Bigger Aspirations Than Metros
This should not surprise anyone. Small towns don’t mean small aspirations. The All-India Aspiration Index stands at 86.9, slightly lower than last year’s 87.4. The non-metros, however, have scored 87.4 compared to the 86.6 scored by the metros. Of the 12 cities the Aspiration Index surveyed, Bhubaneswar emerged on top with an Index of 90. Last year, it was Chennai with 88.8. Trailing Bhubaneswar in 2019 are Indore and Hyderabad at 89. The numbers indicate that people in smaller towns are less constrained in pursuing their life goals. The reasons for this are many: lower costs of living could be one.
Women Over 35 Have The Biggest Aspirations
The 2019 study has identified three distinct age-based cohorts, each with its unique money habits and life priorities. These cohorts are Early Jobbers (ages 22-27), Moneymooners (28-34) and Wealth Warriors (35-45). The Early Jobbers scored 86.2, Moneymooners 87 and the Wealth Warriors scored 87.23—an indication that aspirations increase with age, which is counterintuitive to the idea that you’re more idealistic and full of dreams when you’re younger. Overall, males (87) score higher than women (86.3) on the Index. However, the cohort that scores the highest overall is female Wealth Warriors, who top with 87.9. Indian women over 35 have the largest aspirations of any group.
Buying A Home Is The Biggest Aspiration
Of the 25 goals across the six major aspirations, the most important one to Indians is owning a home. This hasn’t changed since last year’s study. This year, on importance of parameters, “to buy my own house” scored 92.1 on the Aspiration Index. On this goal, Early Jobbers clocked 90.8, Moneymooners 92.5, and Wealth Warriors 93.1. The second most important aspiration is “to save & invest money to provide my children the best of education”, at 92.0. This is also the single most important goal for Wealth Warriors, scoring an overall high of 93.6 for any cohort.
Family Responsibilities Identified As A Major Roadblock
We also asked the respondents to identify roadblocks in achieving their aspirations. Overall, 38% of the respondents said “Family Responsibilities / Constraints” are their biggest hurdle. This is also the biggest roadblock for respondents in North India, and 42% of Moneymooners. Another 37% identified “high cost of living” as a roadblock, and this is also the biggest hurdle for a whopping 40% of respondents from East India, as well as 39% of Early Jobbers.
Concerns Over Health Remain
The study identifies an Aspiration Readiness Gap. This is essentially the gap between the importance of a goal and the chances of attaining it. Just as with last year’s study, the largest Readiness Gap exists in Health Aspirations—an indication that while Indians aspire to better physical and mental health, they are inadequately prepared to achieve this goal. More worryingly, the Readiness Gap widens with age, which means the respondents believe they get further away from their Health aspirations with age, even as they develop higher aspirations in other spheres such as Wealth and Relationships. The Health aspirations of Early Jobbers is at 86.9; for Moneymooners it is 87.4, and Wealth Warriors are at 88.6. However, the Readiness Gap which is 3 points for Early Jobbers and Moneymooners, widens to a whopping 4.5 points for Wealth Warriors. This also needs to be seen in the backdrop of low health insurance adoption rates.
Surprisingly, Youth Saves The Most!
In comparison to the other cohorts, the Early Jobber (ages 22-27) assigns the highest importance to the following goals: travelling the globe (89.3), to keep up with the latest fashion and accessories (88.4), to spend their own money on a lavish wedding (81.7), and to be an entrepreneur (87.5). These seem to conform to stereotypes about millennials—that they prefer to live in the moment, don’t make financial plans and don’t give a thought to the future. All of these assumptions are incorrect. The goals that Early Jobbers assign the highest priority to are buying a home (90.8), to be an expert in their field (90.3), and to save and invest for their children’s education (90.9), showing firmly that their priorities are set straight. Also, Early Jobbers have the highest percentage of savings (40% of salary), marginally above the national average of 38% and also 37% for the Wealth Warriors who have the highest disposable incomes.
(The writer is CEO, BankBazaar.com)