Millennials are a tech-savvy generation who believe in living in the present and typically exchange long-term commitments for immediate gratification. While it is not fair to stereotype, it generally holds in most cases when we say that millennials tend to delay decisions related to careers, investments, and savings. Rather than saving money, they would rather go for a solo-trip. As a consequence, they tend to adopt a myopic view and fail to make long-term investments. However, for long-term stability and well-being, they should consider crafting out their long term goals and working towards achieving the same. You know investing is important. You’ve probably been told it’s important by your parents, commercials, banks, and financial advisors. But you’re stuck. There are so many options and terms being thrown around. Risk level, portfolio, investing diversification, 401(k), IRA. Aside from the information overload of financial terms, investing in the stock market seems like an all or nothing scheme.
Here are some essential money management tips by Pehla Kadam Season 5 that can clear the blur to get on the path of financial security:
Today is always a good idea
The flow of income sources differs from person to person. Some have a steady cash flow, while others have a more erratic one. The bracket you fall into guides the path of starting to save a definite portion of your income at the earliest.
For millennials, reaching a destination is never a difficult task given the ease of maps and steady internet connectivity they have. While setting out on a journey, it always helps to have a path chalked out. Similarly, when you start your investment journey, ensure that you have a steady long-term investment plan and that you stick to it through the ups and downs of the investment landscape. It is advisable to seek help from financial advisors for better insight.
Technology is your best friend
Technology has made the investing process simpler and nowadays it only takes a couple of minutes on your mobile application to open a mutual fund account or invest in it. If you want to go the SIP route for your mutual fund, you just need to confirm your regular investment amount and the day of the month only once. For example, if you wish to invest ₹ 1,000 on the 5th day of every month, all you need to do is enter these details in the application and the amount will be invested directly from your bank account every month.
Inculcate financial discipline
It is only with discipline and commitment that we can achieve the things we want to in our lives. First and foremost, live below your means and don’t spend more than you can afford. Secondly, spend after saving and not the other way round.
Always have something saved for rainy days
Life can be uncertain and throw all sorts of contingencies at us. In addition to the savings that you do to achieve your financial goals, you should create a separate investment fund that can cater to unforeseen circumstances or emergencies.
The best thing about millennials is that they live in the moment, something all other generations have struggled with. While it is a positive habit, being prepared for the future is not a bad idea. For more such tips and information, watch Pehla Kadam Season 5 on CNBC Awaaz.