Ambitious But Financially Illiterate? The Struggles Of Mumbai’s Young Workforce

Mumbai’s young workforce has tall aspirations, but a quieter tension bubbles underneath — how to stretch the earnings to last, grow and shield you in a city that weighs heavily on your pockets. For some millennials and Gen Z who live in India's financial hub, aspirations of being financially independent sit alongside poor financial literacy.

Major expenses of a Mumbaikar include rent, groceries, transport, electricity, entertainment and shopping. “I spend most of my salary on food, dining out, and spending time with friends. About 60% of my salary is spent on holidays and dining out,” says Janhavi Ganguly, a 25-year-old digital copywriter at an IVF clinic.

Instagram affects many youngsters, whose spending choices are impacted by influencers promoting clothing brands or embarking on vacations. Many Mumbaikars working a full-time job, especially Gen Zs, admitted to purchasing things just to share them on the Internet. “I am on social media for approximately 6 to 7 hours every day. Travel blogs have the biggest impact on me. I bookmark many of them for future travel plans,” Janhavi shared.  

A 28-year-old doctor at a notable private hospital in Mumbai said his finances are stable but uncertain. “My ambition is to create multiple income streams, but I’ve yet to draw up a long-term plan.”

Even though he has a plan—saving 30% of what he earns shared among emergencies, investments and daily expenses—the process is still foreign to him. Formal attire by itself sets him back over Rs 20,000 every few months, despite it being more of a professional expectation than personal desire.

‘Start By Saving’

“Financial planning right from the beginning has several advantages. Many youngsters delay investing. But starting early, even with smaller amounts, can help build long-term wealth through the power of compounding, which can be very beneficial in later stages of life,” says Radhika Binani, Chief Product Officer, Paisabazaar. “Not saving for emergencies can damage your finances. Your emergency fund acts as a safety net. You can start by saving funds up to four to six months of your monthly expenses as emergency funds.”

Pratchi Yadav, 23, a creative strategist juggling a corporate job to earn a living and creating content for her own personal brand, offers a different perspective. “I stay in a flat rented by my mother, so my expenditure is minimal. I'm working towards financial independence so I can travel freely. One of my short-term goals is to visit as many countries as possible in my 20s. I know this phase won't last forever, and I want to make the most of it.”

Janhavi, sharing her long-term plan, said she intends to purchase a flat outside Mumbai and set it up as an Airbnb. She also intends to invest in stocks eventually.

While many youngsters have goals and ambitions, heavy expenses of living in Mumbai seem to get in their way. The city has a huge population of young professionals who receive competitive income. Although they are tech-savvy and ambitious, most millennials and Gen Z professionals overspend on lifestyle and lack solid financial literacy to make wise money choices.

Commuting is also emerging as a major expense in the city. Mumbai’s fast-paced life leaves them in a split between using public transport— with the ease of their pockets but risking their safety and comfort— or the option of hiring comparatively expensive cabs, which also gets them into traffic woes.

“My highest monthly expense are travel and food. I spend between Rs 4,000–5,000 on travel and roughly the same on food and dining out,” says Saurabhi Shetye, a 26-year-old PhD scholar and professor.

“My largest monthly expenditure? Traveling—approx. Rs 10,000 a month, since I live quite far away and safety is a concern,” Pratchi adds.

Money Lessons

Mumbai's working Gen Z lacks in being money-savvy—at least not in the traditional sense. Schools did not educate them on compounding interest, SIPs, or EMIs' long tail. They have learned it for themselves, picking insights from YouTube, families or even ChatGPT.

“I did not always have a budget plan, but I account for every rupee, largely via UPI apps such as GPay and record all my expenses. I even use ChatGPT to help me analyse my expenses—having it ask how I can minimise my spendings or save better,” Pratchi says.

“I've not yet found a financial advisor I can trust,” says Ishita Mishra, a 22-year-old former HR professional. She used to spend lavishly on lifestyle—travel, dining out, shopping—more out of peer pressure and ‘FOMO’. However, a tough experience with handling her finances has now turned her attention towards investing in mutual funds via systematic investment plans.

For an array of young professionals, credit cards are still off-limits, with many fearing them as instruments of debt traps. Experts, however, believe one can start building on credit health with a secured credit card or a credit card from the bank where they have an existing financial relationship. “A strong credit health can be very favourable for you when you need credit in future. Late EMI payments, overusing credit cards, or taking unnecessary loans have the potential to damage the credit score,” Radhika Binani suggests.

She also pointed towards young professionals who tend to spend impulsively, trying to match lifestyle trends or peer pressure.

Many youngsters find themselves in a loop of peer pressure and social lifestyle straining their pockets. “I spend around Rs 2,500 on unexpected office parties or lunches with colleagues. Because of these kinds of expenses, I’ve occasionally had to delay or skip payments like rent or EMIs,” says Ishita. “At times, it feels like I’m living paycheck to paycheck.”

Make Students Future-Ready

Several working professionals in Mumbai regret not being able to grasp financial literacy at the start of their careers. Colleges should start imparting significant personal financial education, considering it at par with macroeconomics, one of them said, adding it is vital to learn about stocks, bonds and capital markets in this crucial phase of life.

 “You can't possibly ask schools to cover it all—these are life lessons. But some degree of exposure is required, and it is something the financial institutions should be involved in as well, educating the youth,” says Nanda Padmanabhan, Head - Communications, BankBazaar.com.

Binani, supporting the need for financial literacy in varsities, said this kind of education would enable students to take informed financial decisions when they begin their professional lives.

Nevertheless, there's optimism in the hustle. Whether it's investing in mutual funds via an app, investing in tax-saving products while booking travel tickets, or venturing into SIPs with little knowledge—Mumbai’s Gen Z are learning on the run.

For first-time earners or those with irregular income, like freelancers and creators, finance experts believe the key is to first build a financial cushion to help during lean periods or emergencies.

“Ensure you invest a certain amount of your income in mutual funds or fixed income instruments, such as a fixed deposit from a high-yield-providing bank, for future goals,” Binani said.

Padmanabhan believes the problem is less about overspending and more about not having a consistent benchmark for expenses. “Don't stretch beyond what is reasonable. Invest smaller, but invest consistently. That's one thing. Select an instrument that is right for the kind of investment goal or tenor you have in mind. You can go as simple as a spreadsheet or a physical notebook, or as complex as a budgeting tool.”

When approaching a financial advisor, young professionals must ensure they reach out to someone who is certified and registered. “Your advisor should be willing to listen — to your goals, expectations, and aspirations — and help you build an investment plan based on your reality," she stressed.