New Delhi. In today’s era, earning money is not difficult, but saving and increasing it wisely is the real game. Especially for Millennials and Gen Z, whose life is fast, expenses are high and goals are also very big. In such a situation, without proper planning, money comes in a moment and disappears in a moment.
So if you have started a job or are setting up your financial life after college, a few smart steps can change your entire life. These are the same money moves that will make you stable and also secure your future.
1. First control your expenses
Most people are not able to save money because they do not know where the money is going. In daily life, small expenses like coffee, online food, cab rides and subscriptions together eat up a large part of the month.
Track all your expenses for just one month at once. After that you will understand yourself where to make cuts and where not to. This is the biggest money mover which forms the foundation of everything else.
2. Rule of saving at least 20 percent of income
If you adopt a simple rule that you will put 20 percent of your salary in savings every month, then your financial life starts getting set automatically. As soon as the salary comes, first keep aside 20 percent. Call it not money left after spending, but a system of saving first and spending later. This habit will later help you in both emergency fund and investment.
3. It is most important to create an emergency fund
There is more uncertainty in the lives of Millennials and Gen Z. Changing jobs, travelling, starting a startup or sudden health expenses can happen at any time. Therefore, it is important to keep at least 6 months’ expenses in an emergency fund. This fund should be very liquid so that money is available immediately when needed. With this, your investments remain safe and you do not need to take a loan in difficult times.
4. Start investing early so that money grows faster
The biggest strength of Millennials and Gen Z is their age. The sooner you start investing, the more your money will grow over time. Even if it is a small amount, start SIP. With this, the power of compounding will give you great returns in the future. A common mistake in investment is to panic when the market falls, but in reality this is the time when shares and funds of good companies are available cheap.
5. Plan according to your future goals
Everyone’s goals are different. Some have to save for their home, some have to study abroad, some have to start a business. Divide your goals into short term, mid term and long term. Savings are suitable for short term goals, balanced investments for mid term and high growth funds for long term. If the goals are clear then the investment will also go in the right direction.
6. Creating side income is the biggest strength of today’s generation.
Gen Z and Millennials have the internet and skills. Today people are making a good side income through video editing, designing, content writing, social media management, trading or even selling small courses.
Side income not only increases your savings but also takes you towards financial freedom.
7. Use credit cards smartly
Credit card is not wrong, it is the way of using it that is wrong. If you pay the bill on time with full payment, then the credit card strengthens your credit history and it becomes easier to take a loan in future. But stay away from traps like minimum payment, otherwise the interest increases so much that the entire budget gets spoiled.
8. Increase financial knowledge
Learning finance is no longer optional for Millennials and Gen Z. It is important to have a grasp on some information like what is ETF, how SIP works, why term insurance is necessary. The more knowledge increases, the less the fear of money will be and the smarter the decisions will be.
