Tips for Millennials on Sound Financial Planning – Hindustan Times | Gmx Pharm

Millennials make up around 30% of India’s population and are also part of the budding start-up crowd. The financial and investment habits of older generations were different than those of millennials. “For the former, the traditional way of investing was to buy a house, gold, or probably a big marriage; They used to invest for the long term. Also, let’s not forget that people of this generation saved more and spent less. They also compromised their desire to spend money. This generation had a lot of patience, perseverance and even if they dreamed of acquiring an asset, they never got it unless they had sources to get it,” says economist and finance expert Sharad Kohli. He adds: “The millennial population is a bit restless, albeit in a good way; and they don’t compromise their desire to spend, which is why it’s important for them to plan their finances and manage their money well—which is required.” Kohli shares with us some tips for millennials to manage their finances well administer:

Manage your money well

As a financial professional, my tip for you is to follow the 50-30-20 rule. This means that they should spend 50% of their salary on their current needs or essential expenses – like renting a flat, commuting, groceries, etc., while 30% should be used on personal needs – like making money – buying trendy clothes, spending money on friends, go to parties and so on. And 20% should be invested in savings deposits. This will save millennials on a rainy day when they need money or when they need to spend it on vacation or buy a gadget. If they don’t have savings, they won’t be able to spend money on those things, and we can find them asking for money here and there or feeling depressed – because they won’t be able to buy the things that they desire.

Don’t forget insurance

Most millennials forget about insurance. Suppose they lose their phone or have an accident with their car – and they find out they don’t have car insurance! What about health? Tomorrow, God forbid, if there is an illness or an accident and they have to be hospitalized, it will take all their money away from them. So I think life insurance, health insurance, auto insurance – Millennials need to spend money on those particular aspects.

Invest in the future or in retirement

When millennials are asked about their investment for retirement, they say, “Oh, 25 to 30 years from now. We don’t want to spend anything on that now.’ But what they forget is a small amount set aside for retirement – or for the future, even if it means going abroad, celebrating a big wedding, or celebrating your birthday on a plane, or a dream, you want to fulfill – if you don’t have enough money in your coffers, you won’t be able to fulfill them; Most importantly, invest in your retirement because, at the end of the day, every millennial needs to grow old. At some point they would like to hang up their boots and retire. I’ve seen people retire at the age of 45; They take early retirement because they want to pursue their passion or dream of spending their time on a mountain or traveling somewhere. Therefore, investing for retirement is an absolute must.

I also noticed that the investment patterns of older generations were different; Historically, these individuals have invested in gold, time deposits, government savings bonds and, to some extent, real estate. While millennials would opt for cryptocurrencies, they try their hand at fast-moving stock markets or derivatives markets – where they can make a quick buck. There’s nothing wrong with that, although caution is advised if you’re going for things that haven’t been recognized yet.

Diversify your investments and borrow less

What millennials do is they put all their eggs in the same basket! That means placing all the money in the same place. They get carried away with handsome returns that may not be sustainable or turn out to be true at any given time. Also, they follow the YOLO concept (you only live once) – in this process they overspend – more than or all they earn. Then they tend to borrow something. So my advice would be that they should avoid borrowing too much, living on EMIs or loans. They should limit the amount of credit they take out. You should only borrow as much as you can comfortably pay for. Even if they have to limit their desires, they must have those limitations and refrain from over-indebtedness. Spending more than they earn is a big NO.

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