Chapter Two Blog - Money Management Hacks for the Millennials

15 Dec 2016

Money management hacks for the millennials

Saving money while changing the world: Money management hacks for millennials

Millennials, also known as Generation Y, are the kids born in the 80s and the 90s. They are one of the largest, most influential demographic groups of the world. They are the frontrunners of change in almost every area.

Their influence is being felt in areas like science, math, arts and business. They are impatient with the status quo, full of bold new ideas and are often found leading the way for changed societies, companies and infrastructure. Raised on the internet, millenials are the world’s official trendsetters. They are the golden goose that every marketer is chasing because not only are they are at the right age to be lifelong consumers but are also influential in getting more people to become like them, through a plethora of digital communication from social media and blogging to videos and e-commerce.

Vision. Skill. Courage. Coolness. Sensitivity to the environment. Millenials seem to have it all. But society has always rightly pointed out their lack of savvy when it comes to professional and financial stability. Despite being intelligent, passionate and trendsetting, millenials are notoriously impatient with the tediousness that accompanies conventional choices, from standing in line to draw money to sticking to a company for five years before one sees results. There are more reasons:

1. They are fans of ‘now’ as opposed to tomorrow. Intense experiences take precedence over prudent, boring long-term planning.

2. Hooked to credit and online payments at an early age, they are more susceptible to impulse purchases than the previous generation and hence, tend to run out of money soon.

3. They are not easily led by advertising. Instead, they prefer more authentic endorsements like a friend’s review before making a purchase decision.

4. They prefer to rent rather than buy. Millenials don’t want to be saddled with debt. They want to be free to explore life and the world.

5. That said, many of them have educational loans to clear.

6. More and more millenials are opting out of marriage and instead prefer to live in.

7. Many of them don’t want children.

With no interest in the long-term, buying a house or raising kids, millenials don’t understand the fuss around the biggest driver of the previous generation: money.

If I appear judgemental about millenials I’d to clarify I am certainly not. Firstly, I think they are a terrific bunch of people. Some of the world’s biggest, most fascinating changes, be it in technology, entrepreneurship, medicine or sport, are being driven by millenials. They are non-judgemental, believe in diversity, respect their environment, and are questioning many out-dated social mores that the previous generation took for granted and suffered with. If this is not the sign of change and progress, what is? Having said that, money is unfortunately still important so one can be financially secure even while changing the world. So here are a few hacks millenials can adopt so they can plan their finances better:

1. Have a goal: What do you want to achieve? Write it down. Make a plan to get there, one small percentage at a time. Don’t be afraid to start small. Great things come from small beginnings and persistence. Some fundamental laws don’t change. Having faith in them doesn’t make you boring or old fashioned; it just makes you smart.

2. Start a separate account/fund for your goal: Every month, set aside a definite amount of money for these accounts to start saving.

3. Analyse your expenses: Figure out how your money is getting spent between necessary expenses (rent, food, commute, loans) and discretionary expenses (entertainment, hobbies etc.) Knowing where money is going helps you manage it better.

4. Optimize your expenses: After analysing where you are spending your money, identify what you need to cut and take definitive measures.

5. Choose payment options that reward you for your choices: Use credit cards or mobile payment mechanism that offer discounts and cash back options. For example, if you are frequent flyer, sign up for a credit card that gives you free access at lounges, cash backs and discounts on airline ticket purchases and hotel bookings.

6. Automate all payments: We lose a significant amount of money by way of late payment fees and fines. If you automate, the money is paid up on time – be it credit card, home loan or a rental.

7. Explore investment options: Explore options that can yield medium to high returns with the help of some investment management company.

8. Embrace Technology: Identify and use apps that will help you in budget management. Saving and investment does not have to be boring. You can set up alerts on the tools that can give you tips on saving and investing.

Changing the world is awesome. But it never hurts to have enough money to buy a car, enjoy that dream vacation with your partner, or buy a villa in Spain for when you want to retire!

About the Author:

Sandhya Reddy is a Life coach and Leadership coach based in Bangalore, India. She is the Founder and Principal Coach at Chapter Two Coaching, a coaching consultancy that enables everyone from CEOs to work-from-home parents to achieve their goals by replacing self-imposed limitations with enabling stories.

Sandhya, a life coach in Bangalore, who runs a life coaching academy, can help individuals with a desire for change to examine their beliefs – or their ‘stories’ – and change them for the better, so they can achieve their goals.

Many of us in our thirties experience a disquieting realization: what brought us to middle-management may not take us to senior-management. This is true. To chart a new career path, one needs to think and do things differently. This is where Sandhya can help. She is a coach. Life coaching, executive coaching, personality development, leadership coaching… they are all part of her forte. Her Executive coaching programs helps tomorrow’s leaders set new goals, make new plans to achieve those goals, get that elusive promotion through a blend of knowledge, action and image-building, enhance influence among the leadership team, be more productive, get more out of one’s team, and be known in the company as an indispensable performer and future leader.

 

 

 

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