10 Things Millennials Should Know to Grow their Wealth

Often glued to social media and lost in virtual reality, what does an average millenial know about financial management? A millennial is anyone who was born between 1981 to 1996 and is currently aged between 22 years to 37 years. This age group constitutes the young generation in any work environment. While this generation has mastered the art of hailing a cab, ordering food online and using mobile apps, what about financial management? Well, the foundation may be quite shaky for most people who fall in this age group. Financial prudency is required at every stage in life and it is always better to start early than to begin at a later stage in life when things get complicated or when it is too late.

In this article, give this generation the most valuable tips when it comes to money management.

Tip 1 - Say hi to personal finance apps: Using a personal finance app is very simple in today’s world. Most of these apps are free and there are no charges involved to use 90% of all the features. This kind of app is easy to use and will automatically track each and every expenditure incurred on a daily basis. Many apps also have a section where they give you some useful financial tips and also tell you where you need to cut down your spending overall to achieve your financial goals. Also, you can set automatic reminders for credit card and also utility bill payments through these mobile apps. So, start using a personal finance app and see how it helps you manage finances on a day to day basis.

Tip 2 - Track where you are spending, arrest spending: This is one of the most important strategies to follow for personal finance management. The thing here is to not stop spending but to be fully aware of where your money is going. Once you know this, you will know where you are spending excessively. For example, if you are taking cab rides all the time and spending more money on transportation, you can look for a cheaper alternative such as boarding a metro train instead. Are you spending too much on eating out or ordering food online at office? Try to make home cooking more fun by trying new recipes, throwing dinner parties, or even taking fun home-cooked meals to office. Do not forget to track your spending behavior.

Tip 3 - Start saving a portion of your salary each month: Living from one paycheck to another is a big no no. The habit of spending everything from your salary account each month and being broke at the end of the month is not going to get you anywhere, and quite literally. Make sure you are setting aside a portion of your pay monthly in an investment scheme. Ideally you should be saving at least 10% to 20% of your monthly salary. So, if you earn Rs.20,000 a month, and you save 20% of it, you will have to set aside Rs.4,000 each month. So, why not start a Systematic Investment Plan (SIP). Invest Rs.4,000 each month in a SIP or even a recurring deposit account. The idea here is that it does not matter if you earn less or more. No matter how much you earn, you need to be financially prudent and take the first step towards saving money. Take the baby steps and inculcate a savings habit before it is too late. Do not deplete all your resources.

Tip 4 -There is something called investing, do it: Just saving money in a savings bank account will not cut it. You need to make your money work for you and earn out it. Even if you start small, it does not matter. The idea is to make investments that will pay you in the long-run. So, if you have a lump sum saved up, do not keep it idle in a savings bank account, open a fixed deposit instead. This will help you earn more interest when compared to what is paid on a savings bank account. You can also look for other investments options. Take the first step and go make that investment that you have always wanted to make.

Tip 5 - Explore the options: In today's world, there are numerous investment options that are available. There are different degrees of risk associated with each type of investment. For example, investing in a fixed deposit is one of the most risk-free and offers you guaranteed returns. On the other hand, if you put your money in an SIP, you can earn more out of the investment but there is a slight risk associated. There are also other options available such as gold bonds and shares. So, take a look at the range of investment options that are available at your disposal instead of jumping at the first option that you get. While most Indians tend to be very conservative when it comes to making investments, make sure that you are not overly conservative as it will bring down your chances of earning money.

Tip 6 - Do not ignore insurance: One of the other most important things to do when you are planning your financial portfolio is to make sure there is insurance in it. Both life insurance and health insurance is crucial. And the best part is, the more young you are, the lesser is the premium cost for insurance products. It is best to go for insurance when you are younger because there are more chances of you getting a higher cover as well than when you are old. So, go for a health insurance policy and a life insurance policy.

Tip 7 - Plan your taxes: You are way into adulthood but still do not know a thing about taxes. There is no excuse. It is very important to be aware about the tax aspect of life. Do a little research and learn how to do your taxes. Learn more about how you can avoid paying a lump sum by making certain types of investments. SIPs, FDs, and PPF, all give you tax benefits. Even life insurance and health insurance comes with tax benefits.

Tip 8- Look for freebies: If you have a credit card then look for the various complementary features that comes with it. This may include free meal vouchers, buy one get one free movie tickets, reward points and cashbacks. Make sure you are making the best use of all of these and not wasting money in any way. So, hunt around for financial freebies and make the best use of them. Also, ask your employer the perks and benefits that you are entitled to. 

Tip 9- Take calculated investment risks: This is the age for us to take some element of financial risk. As you age, it will become more and more harder to take up any type of financial risk. Any investment portfolio should be made up of a mixture of investments that include risk-free options, mid-range risk investments and also a small share of risk-prone investments. This way, you are balancing out your financial portfolio and this will help you gain.

Tip 10 - Have a retirement and emergency fund: After all the financial planning that you do, what is the point if you do not have enough money for the retirement. This is one aspect that most people ignore. So, before you make all your ambitious financial plans, first make sure that you set aside some portion of your earnings for an emergency fund. After you have an emergency fund, the next thing to do is to create a solid and pool-proof plan for your retirement

On a concluding note
The previous generation always has a tendency to be tough on the current generation. It is not easy being a millennial and life at this time and age comes with its own set of challenges. However, despite all this, it is very important to look at how we can be financially secure, especially when the types of jobs are evolving and the whole concept of pension has already died down. This is why it is more important to start saving towards retirement from the very beginning, in fact, this should be done from the first paycheck you get at the first job. Create a financially secure life for yourself and stay happy!