Parents and elders in society may think that millennials are more restless and don’t plan for their future because they didn’t have to slog and struggle like the generation of baby boomers and Gen X who have experienced more hardships. They didn’t see as much affluence. They feel that is one of the reasons why millenials, the generation born between 1982 and 2004, sometimes come off as self-centered and take hasty decisions. They don’t think about their future, families or retirement plans.
Although the allegations may not be true, whether you are young, middle-aged or one with a few strands of grey hair, financial planning is important for stability in life. Whatever be your aim in life, start saving from today and using good investment options so that you can make your money “work” even when you rest.
Why savings matter?
Millenials today are upwardly mobile and have become nomadic in nature. They travel thousands of miles in search of jobs (not food!). Millenials not only travel for jobs, but also because they enjoy travelling and a millennial is much more likely to cover half the globe by thirty than a member of a Gen X would by fifty. Millenials are also more prone to give up steady jobs and seek out their true passions that lead to mental satisfaction and self-cultivation.
One thing needs to be clarified. Whatever you do, you can’t live without food and shelter. That is why you should start saving when you are still young, preferably in your twenties. Automation and electronic transfer modes mean that you can directly transfer a portion of your salary or money parked in your bank account to tax free savings accounts and other fixed income instruments. So, if you start working in a company and plan to quit by 35 or 40 before trying something else, you would have a comfortable cushion that will lend support to your endeavor. That would mean that you can enjoy your life without worries.
Why should you think of making investments?
It is just not enough to earn or save. A millennial should also know how to make his money grow at a compounded rate of interest. The number of startup or social entrepreneurs is increasing and many projects might fail initially before you discover your right niche. The additional income will give you the wherewithal to go through the grind. If and when you need loans, say when starting a company, investing in real estate or if you want to return to school, the extra money can bail you out of a lot of trouble.
Try to stay away from short-term, high interest loans as much as possible if you want to stay debt-free. Don’t use credit options unmindfully. Also, never forget the virtue of fiscal discipline.
All this will help you lead a comfortable life later on in your life. It doesn’t take a lot to make a plan but it can be really helpful. You will know how much you are spending, what is your debt and how much you need to earn to achieve your dream. This will help you to dream big!