- Date : 29/06/2020
- Read: 4 mins
Millennials are making independent financial choices, but many still need money-saving tips
A section of analysts, however, see a downside to this: millennials spend beyond their means and this often leaves them broke by the month-end, they say. Says Vineeta Jain of Pay It Forward, an initiative that seeks to educate young professionals about personal finance and money management: “Saving is the last thing on their minds.”
The savvy millennial
But is the scene really that bad? Is financial planning an alien concept for the average Indian millennial, as is often believed? Quite the contrary, says a report by BankBazaar, released this July. “Millennials are empowering themselves by making independent financial choices,” says the aggregator, following its survey that covered 1551 respondents, both men and women, between the ages of 25 and 35 in 12 Indian cities.
The findings also debunk the theory that millennials are clueless about financial planning and have no financial goals. In fact, as per BankBazaar, they ranked ‘wealth creation’ as their topmost goal, with 69% ranking ‘buying a home’ as their biggest aspiration.
BankBazaar says the future looks good for the millennial, but as Pay It Forward’s Vineeta Jain warns, there are always some who will have no clue about finances. So, for the financially clueless, here are some money-saving tips:
- Live within your means: It does not matter how small or big your paycheck is: whether Rs 20,000 a month or Rs 5 lakh, you have to learn to live within that amount. A credit card is for emergencies; it may have cashback schemes and mileage points, but it is a loan to be repaid. So spend responsibly and shun unnecessary loans.
- Invest in mutual funds: Keep aside at least 15-20% from your salary for saving and investing. You have age on your side; investing in equity mutual funds early on will prove very productive over the years. A monthly SIP of Rs 2000 in a mutual fund at a CAGR of 12% will yield about Rs 70 lakh after 30 years. So basically, you are doing something more than saving here: you are creating wealth from your savings.
- Make use of 80C tax benefits: Did you know that investments up to Rs 1.5 lakh in equity-linked savings schemes (ELSS) are eligible for tax deductions under Section 80C of the IT Act? So investing in a SIP of ELSS – which are tax-saving mutual funds – not only creates wealth but also offers you tax savings.
Related: Millennials and money
Learn to save. Just do it, whether for investments or for an emergency fund to tackle unexpected expenses. How much you need to save is up to you; just be comfortable with the amount and stick to it. Remember, to gain from investments you need to be disciplined and patient. In the long term, you will emerge the winner.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or insurance or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.