According to a latest study, COVID-19 pandemic has changed the way millennials looks at money. While this generation earlier believed in buy-now, pay-later policy, now they are quickly thinking about saving for a rainy day. Professionals facing the risks of layoffs and salary cuts are learning to adjust with lesser money. According to a survey by the ISLE (Indian Society of Labour Economics), around 80% of jobs were affected in urban areas. Additionally, the pandemic affected around 54% of employment in the rural economy.
These circumstances call for efficient money management, especially for millennials who have a significant share in the economy. To ensure that, here are five money management tips for millennials that will not only help them survive this crisis but be prepared for any future uncertainties:
- Don’t do irrational spending
One of the significant things essential for creating a good financial plan is to not live paycheck to paycheck. Work on finding a place to cut costs, so that you can build a financial cushion quicker to not only support your expenses but to also increase your quality of life in future.
- Learn good financial budgeting
If you’ve gotten a promotion or a raise and detect yourself spending it, it’s high time you have a good look in the mirror and change your spending ways. There are many apps available that can help create a budget. You can also consider availing the services of a financial planner who can help you discover new ways to cut down on your expenses.
- Learn to manage your card debt
If you’re a young millennial, chances are you might be opening your first few lines of credit. Unlike, cash payments or debit cards, several credit cards offer points or cashback incentives. One of the major reasons why so many people avail credit cards is to take advantage of 0% interest on your payments. So, work this incentive in your favour and try to become debt-free. However, always remember to pay your credit card bills on time.
- Curate your investment Goals: An efficient financial plan comprises of long-term and short-term goals. An investor must allocate funds to goals accordingly depending on their priority. It is vital to understand that long-term goals take years to achieve, and you need shorter milestones to keep yourself motivated.
- Make investing a Habit:Investing is not a one-time thing. One should inculcate these habits as a part of the lifestyle for a lifetime. An SIP mutual fund investment helps you do the same. SIP (systematic investment plan) is a means to invest in mutual funds. You can also use an SIP calculator to calculate the returns on your SIP investment.Investing in mutual funds is a great way to prepare for future financial crisis. With so many types of mutual funds available to an investor, an investor can never fall short of choices. Remember to always align your mutual fund investments with your financial goals, investment horizon, and risk profile. Happy investing!