Golden tips for millennial

Millennials or GenY, the generation born between year 1980 and 2000, are fast entering their earning and spending age, growing up in an age of rapid change, having a set of expectations and priorities that are different from those of the older generations, called GenX.

Before stepping into full fledged financial planning, in the later stage of stable career, here are few initial golden tips for the millennials to develop their money management habits.

First: Record all your expenses, keep watch on spending including credit card. Ideally compulsory expenses should not be more that 60% of your total income leaving 40% for saving and discretionary expenses.

Second: If you have educational loan, and credit card dues, prioritise its repayments. Defaults in loans affects credit score which may create hurdle in future.

Third: Make compulsory planned saving and not optional. Saving could be in the form of PPF, SIP etc.

Forth: Keep Emergency fund in the form of Fixed Deposit. In case of need take loan against FD instead of liquidating it.

Fifth: Avoid commitments of large payments like housing loans, big premium insurance policy because it may hamper flexibility of shifting to preferred jobs in the initial days of the career.

Sixth: Never get lured into getting method of quick bucks like trading in high risk future and option market, forex market or any Ponzi schemes.  There is enough money made by informed investors.

Seven: Focus on career growth. Allocate fund and invest in yourself to update yourself with required education and learnings.

Be wise, money-wise.

 

 

 

-Kishore Hegde, CFA

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