In this age of technology and industrial growth, individuals are earning at a young age. Those born from 1980 to 2000, called the ‘Millennials’, love to live larger than life. This is not ‘the age of reason’. It can well be called ‘the age of spending’. Thanks to digital lending platforms, the millennials’ are finding easy routes to avail short-term loans to finance their lifestyle spending. For the 18s and 29s, credit cards are a must — ‘the many swipes to financial freedom’. Often the ‘young things’ chase their dreams without giving adequate thought before spending recklessly that often land them into unnecessary borrowings from banks or relatives. Eventually, most youngsters fall into a debt trap. In the US, for instance, the millennials are the most indebted generation with more than $1 trillion of debt, according to the New York Federal Reserve report. Most of the millennials are hooked onto Facebook. There is nothing wrong there. Its founder is the century’s first Millennial CEO and arguably the most frugal billionaire. He spends less and saves more. The followers of Facebook should also ‘like’ his modest living. Here are the few things millennials should avoid for a better morrow for themselves and in the larger interests of the nation.
Decrease the dine-outs
The growing lifestyle of dine-outs, shopping and unplanned travels form a major part of expenditure month after month. Most don’t spare a thought for future contingencies. This needs to be controlled. Low expenses are indirect savings. These savings can be converted into wealth. In addition to cutting down on unnecessary expenses, millennials’ should explore additional earnings sources, apart for their primary source of income. This will not only help them in saving but also provide them with some extra cash to spend.
Low debt is the key to success
are susceptible to borrowings. Most don’t pay attention to the disclaimers on such borrowings. This generation is often in a hurry and wants cash with minimum fuss. Credit cards and personal loans are treated like best friends. Treat them as enemies. Remove them from your list to achieve financial freedom. Loans incur hefty EMIs and interest outgo. Often, these loans are availed for unplanned or unnecessary purchases or for clearing some other debts. This EMIs combined with daily expenses should be seen as an enemy to your earnings. Stay away from debts, treat them like the plague.
Dreams can wait, savings cannot
Millennials are the stuff of dreams. Dreams could take years to fulfil. If dreams are to be fulfilled, one has to do proper planning and implementation. One must have a clear vision of how to accomplish those dreams. Most fail to prioritize saving for retirement or creation of emergency fund or child education and opt for short-term benefits. Our working life span stretches up to 30 years. The sooner we start savings, the better would be the retiring days.
Investment risk is worth a shot
Mere savings will not build wealth. Savings should go with investments. Investment decisions play a crucial role in achieving financial freedom since the money saved is the money earned. Today, investors have a plethora of investment options with ‘risk and return’ combo. A millennial should not have aversion to risk in so far as investments are concerned as the young may not have major responsibilities. Taking a risk in the right way can help you in achieving financial freedom.
Medical insurance is a must
This is important in case there are dependents and if the millennial is the sole earner. Medical expenditure makes a huge dent in savings. Medical insurance takes care of your dependent’s expenses on hefty hospital bills. A small premium may seem irrelevant for millennials. Its importance will be felt at the time of a medical emergency. In addition to parental medical insurance, term insurance is necessary. Term insurance secures your life and provides finances in the event of a sudden loss of the dependent in the family. Medical insurance will act as a safety cover.
Work-life balance is important and prioritizing your health is a must. Enjoy a session of yoga, enrol for any outdoor sports activity, follow your hobbies and take a break when needed. Good health is a great wealth. Staying healthy can help you design your financial independence and plan your retirement. Planning, implementation and discipline are the three important aspects of life’s journey.