Are India’s millennials money-savvy?
We might be spending like there’s no tomorrow, but we’re also saving like it isn’t too far away. Confused? Millennials are full of contradictions when it comes to financial planning, but the solutions to most of our money issues are quite simple.
Advice. The younger you are, the more often it’ll find you. And, the less likely you are to follow it. But, if you’re a millennial (that’s anyone born between 1982 and 2000), here’s a bit of wisdom you’ll swipe right for.
Wealth is the No. 1 priority for India’s millennia according to this survey, and we women value it more than men. We’re also in a better position to achieve our financial goals than previous generations, though we’re still using their financial planning methods. Our lifestyle’s different too. We’re earning and spending more while putting off personal commitments like marriage and kids to achieve short term goals. However, we’re not as bad with money as we’re made out to be. We’re saving a reasonable part of our income, and – here’s an eye-opener – our biggest financial aspiration is to own a house someday. In fact, with the right financial planning, we might even do better than our parents. Here are a few pointers to get started.
Prep for the future
Our parents started saving up for kids and home earlier than we do today. While they were more focused on the future, we’re all about living in the present. Yet, while maternity leave, kids’ college fees, retirement and healthcare costs might still be dots on the horizon, why not put a little something away anyway? When it comes to financial planning, starting early means paying less but earning more interest. Sounds like a win-win, don’t you think?
Discretionary expenses (such as money spent on shopping, travelling, and eating out) take a good chunk out of our incomes. While you don’t have to deprive yourself, there are more economical ways to look trendy and chow down at all the latest restaurants. It’s also worthwhile to track your expenses and then make a monthly budget. You’ll be surprised to see how much you’re actually spending on the little things. Cut down on them, and you can save more for that holiday that’s been on your bucket list for a while.
Take the risk
A majority of millennials started working during the stock market-led recession, and are wary of investing in stocks and shares. We’re also influenced by our parents’ reluctance to wade into the stock market. Moreover, young men tend to invest in equities more than women, according to this study. But think of it this way – isn’t it best to take a risk when you’re younger? As you can afford to invest for the long term when you begin early, start with an equity mutual fund to explore the stock market; it hedges against market volatility while offering higher returns.
Get health insurance
Being young often makes us feel invincible, but has playing safe ever hurt anyone? Most millennials depend on employers for health insurance, but it helps to increase your cover by also having your own. Health insurance costs less when you’re younger, and you’ll also get a tax break. Also, if you’d like to dabble in the gig economy, create your own start-up or just take that long-overdue sabbatical, this is one less thing to worry about.
Ask a pro
Given how millennials use technology and embrace any service that makes life easier, it’s surprising that most still have an old-fashioned approach to financial planning. For those in the 21st century, there’s Basis, an online platform that powers personal finance for women. It was founded because women are underrepresented in and underserved by the finance industry, even though we have more financial aspirations, and power, than ever.
When we’re young, we have more opportunities than regrets. ‘If only I knew then what I know now’ isn’t something we’d like to catch ourselves saying years later. Especially because, well, now we do know.