Finance

Financial Planning For Millennials: A Guide

The younger generation takes a radically different approach to financial planning and wealth management than baby boomers. With more interest in emerging assets such as cryptocurrency and real estate, they are changing the wealth management game altogether.

However, as discussed at international finance events, financial planning has taken a backseat for a huge chunk of the population because of rising debts and the cost of living. Even though millennials have had unlimited access to information online, many still complain of being unaware of the basics of financial literacy, such as filing tax returns or investing in stocks and bonds. In addition to this, the wide availability of credit cards can send their finances into a tizzy. 

To help them get started on their financial planning journey, we have rounded up a few tips: 

Track your expenses 

Getting your finances in order might seem intimidating, but one has to take small steps to make a big difference. This begins with budgeting and planning your monthly expenses and sticking to your plan. With this, you will be able to keep aside cash for savings, which will ultimately help you to set future financial objectives. 

Start by calculating your expenses and how you can cut back on unnecessary spending while keeping your income in mind. Here, you can also add your present and future financial goals, which could be anything from purchasing a new laptop or saving for a vacation. This will give you a clearer picture of how you can save up for the same. 

Learn money management 

Savings provide the foundation on which you can build investments and plan for your retirement. To start managing your money better so that you can funnel some towards savings, use the 50-30-20 hack of handling your income. This means that 50% of your income should be diverted towards crucial expenditures such as paying rent, bills, and buying groceries. 30% should go towards your wants, and 20% should go into savings. 

Get yourself insurance 

Many often attempt to save money by choosing not to pay premiums for insurance. However, this can be extremely dangerous for you in the long run. Make sure that you protect yourself from liabilities and prevent health problems from guzzling up your savings by getting insurance for yourself. 

Check out reviews and ask your friends and family members for references if you don’t know how to go on about it. You can also choose to get in touch with an insurer for professional guidance. However, as there are many scams, frauds, and fake insurance schemes out there, do make sure that you do your due diligence before selecting a plan. 

Start investing

Once you begin saving, you can analyze your risk appetite and start investing to make your money work for you. This is the fastest way to build wealth, wherein you can enjoy returns on your savings without having it lying around in your bank account. There are a plethora of investment options available for you, such as mutual funds, direct equity bonds, and of course, real estate. As a beginner, you can always start with Systematic Investment Plans (SIPs) and diversify from there. 

The events which were fuelled by the COVID-19 pandemic taught us how important financial planning is for our safety and wellness. For more wide-ranging insights into financial planning, do mark your attendance at upcoming finance conferences in Dubai, such as the Money 2.0 Conference.