Wealth Tips

How Millennials Should Invest and Manage Money

August 25, 2020

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Millennials want it all. We want money, time to chase our passions, job satisfaction… et all. The goals millennials set are very different from those that previous generations did. Money is a big part of it but we (mostly) understand that money is just a means to an end.

We want the money so we can travel the world, enjoy cuisines from across oceans, enjoy new experiences but that’s not all. We want it all home delivered in hygienic packaging and it better give us our money’s worth or we’ll rant about it on Instagram & maybe even Twitter.

The global economic situation has however given all of us a not so gentle reminder – we need to manage our money better than our parents & grandparents did. How then should millennials invest & manage their money? To understand that, let’s take a look at what we’re already doing.

How Millennials Spend Money

Millennials are spending money & are investing very differently from the previous generations.  There are many examples that showcase this behavioural change. For starters, millennials are using credit cards much lesser as was seen in a study commissioned by Afterpay in Australia.

The pattern of being thrifty exists in India too as illustrated by a LiveMint study that showed that anywhere between 62% to 72% Millenials don’t even go to malls & shops. We prefer buying online and are also making wiser choices when it comes to investing. For example, nearly 56% Millennials are investing in mutual funds or similar financial instruments.

We are also less likely to purchase a house – though that might have something to do with how expensive they are. In fact, forget buying a house, even renting a house in a big city can eat most of your monthly income. That said it’s not like we’re all smart & financially astute.

Why Millennials Need To Invest & Manage Their Money Better

A lot of us are doing financially brash things like buying every new iPhone, getting 100 inch TVs that cost more than a year’s worth of rent. Then there is that sad truth that unlike our parents most of us have private jobs of small businesses which means – no pensions. Retirement is a tough cookie to get your hands on.

The last thing you want is to get across that 60-year mark and realize that you don’t have enough saved up. More importantly, our retirement dreams are a lot more ambitious than those of previous generations. A trip to the local hill station is not enough to scratch our itch. Our “wanderlust” is a thirst that can only be quenched by going to remote places no one has seen or truly exotic places no one can afford to.

So, clearly we need to look out for each other and share every piece of financial wisdom we can. I’m fortunate enough to be surrounded by some of the sharpest minds in the Indian wealth management industry. So, here are some tips I’ve mooched off these wise guys.

How Millennials Should Invest & Manage Their Money

Start small but start now. Time is your friend when it comes to investing money to grow rich. You’ve got to start by building a savings habit & an investing habit. You could try using the Cube Wealth App – it’s a simplified wealth creation app for busy professionals. It will make investing money super simple & tracking it even easier. That said, here’s what millennials should do if investing & managing money is on their list of to-do’s (it better be there!).

Start Investing Now

1) Setup an Emergency Fund

The first thing you need to do is ensure you have 3 – 6 months’ worth of living expenses stocked up safely. These can be in your bank savings account, FDs, or liquid funds that give you higher interest and offer the same level of liquidity

2) Set & Invest For Goals

You need to think of your investments as a whole. What you need to do is to build up a perfect portfolio. Which means you must set goals for the short term, medium terms & long term. These can then be achieved by investing in assets that will give you the required returns over different timeframes.

WATCH THIS VIDEO TO UNDERSTAND MORE

3) Automate Your Investments:

The best way to invest is to automate your investments. This way emotions stay out of the decision making. It also requires you to be less hands-on and you don’t need to be anxious about your investments. You can invest for the long term using SIPs and ensure that you also get the benefits of rupee-cost-averaging.

WATCH THIS VIDEO TO UNDERSTAND MORE

You can also read our article on Best Ways to Invest Money, to guide you through the best options out there.

Benefits Of Financial Planning & Investing Through Cube Wealth

  • Peace Of Mind: You will sleep better knowing your finances are in order
  • Goal Achievement: With a consistent investment habit, it’s easier to achieve goals
  • Wealth Creation: Investing using an app like Cube Wealth you can grow wealthy
  • No Hassles: By automating investment you will enjoy stress-free investing
  • Expert Advice: You’ll get expert wealth advisors to guide you through decisions
  • Easy Tracking: You’ll get one single view of your whole portfolio

Start Investing Now

FAQs - Frequently Asked Questions

Q. What are millennials spending money on?

Ans. Millennials are spending money on experiences, gadgets, education & smart investments. Though this varies depending on which part of the world we’re talking about.

Q. How important is it for millennials to manage their money?

Ans. It is crucial for millennials to manage and invest their money. They do not have the classic benefits of pension that previous generations did. Property & homeownership are also much harder goals in today’s world.

Q. When should millennials begin financial planning?

Ans. Millennials should start financial planning as early as they can. Time and compound interest are two things that can help them grow wealth substantially over the long term.

Q. Are financial planning and money management the same?

Ans. No, financial planning is the theoretical and strategic part of money management. The actual act of saving, investing etc for the achievement of financial goals are what makeup money management.

Q. Is money management for millennials different in different countries?

Ans. Yes, to a certain extent based on their geographical location, millennials need to save & invest differently.

Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity. Besides building content for multiple start-ups, he has written scripts for YouTube videos, digital ads, short films, TV Shows and films.

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