Millennials are apparently the most privileged generation ever in terms of access to avenues for managing and making money. Millennials are apparently the most privileged generation ever in terms of access to avenues for managing and making money.
3 ways COVID is changing Millennials Money Habits
- Millennials are cutting back on spending
Over half (54%) of millennials surveyed said the coronavirus has impacted their purchase decisions more than any other generation, according to a First Insight survey published on February 28. It’s caused 40% of millennials to say they’re cutting back on spending in preparation for coronavirus.
- When millennials doing online shopping
Millennials are also cutting back on in-person shopping trips 39% said they’re shopping less frequently in stores, compared to 30% of overall respondents, , citing the First Insight survey. And 30% said they’re shopping more frequently online instead, compared to 21% of respondents across all age ranges.
- Some millennials are buying cheap airline tickets
In a time when coronavirus has decimated air travel, airlines are dropping prices and offering flexible ticket policies to some locations. The 20-somethings with said they want to capitalize on this for various reasons: to explore new destinations, enjoy a vacation, or see family.
1. Have one no spend-day a Week or Month
Many financial gurus recommending instituting a ‘no spend day’ in order to make you think more cautiously about your expenditures.
Start out at once a month. It’s fairly self explanatory – just don’t spend any money at all in one day. It is less about lowering spending overall and more about making you think about where your dollars are going.
2. Start Saving
But Millennials with a penchant for travel, fancy gadgets and the latest fashion, unfortunately, end up delaying important ‘long-term’ plans. An ET report states how people between the ages of 22 to 35 years are mostly single and don’t feel the need to save for the future and go on a spending spree. In other words, most Millennials have more disposable income because many don’t hold immediate responsibilities. It’s time to re-think such situations and always look for avenues to save up whatever little amount you are making.
3. Track your Expenditure
As mentioned in the point above, Millennials usually see income as being disposable, something to be used for immediate purposes like paying house rent, groceries and dinners outside. That’s how many of them are caught in the vicious loop of living from paycheck to paycheck. What many don’t realise is that noting down even the smallest amount spent can give one a perspective on their spending pattern. It’s a sure-shot way to cut down on expenditures.
4. Learn about Mutual Funds
According to a report, 12% of millennials who aren’t investing said they lack the right knowledge. When addressing long-term goals, investing through Systematic Investment Plans (SIPs) is the right way to do it. It does not matter how small or big your paycheck is, you have to learn to live within that amount and keeping at least 15-20% from your salary for mutual funds will yield positive monetary benefits.
5. Learn Stock Market Investments
Many Millennials may recall the major stock market decline like the Wall Street Crash of 1929 or the financial crisis of 2007–08. Stock markets are an alien arena. While some are overwhelmed by the sound of it others are just not interested to delve into complicated numbers. Amid the ongoing pandemic, however, there’s been a major shift with younger people taking interests in understanding stock market investments.
6. Cut Additional Expenses
Although it’s less becoming less common among Millennials to still have cable, chances are you pay for some kind of online entertainment. Whether Netflix or an Amazon Prime or Audible subscription, it adds up. Consider cutting the cord and using your local library for entertainment. In addition to physical books and DVDs, many libraries are modernizing their collections and offer at-home streaming services, e-books and audio books for free.
7. Upskilling
It is probably the best time when people can demand a paycheque in proportion to the skills they command. Rapid technological advances are making college learning’s redundant with each passing pay, creating heavy demand for skilled persons in the job market. Millennials have sensed this opportunity and are upskilling themselves through all means possible. No wonder why digital upskilling and education platforms like Upgrade have seen a massive rise in the number of enrolments.
While upskilling is something for which millennials have to spend from their wallets, they are happily doing this to seek better-paid jobs in the market.
8. Be cautious about Insurance
Be it student loans, buying or renting a place to live or having kids, all of these will need one to purchase insurance. These major life events for Millennials make it extremely important to have a financial security net. Insurance provides essential financial protection for your future and so, no matter how complicated it sounds, it’s important learn about its benefits and start investing some money in it.
9. Automating Wealth Creation
Millennials are creating a new habit of money-making by automating the process of investing or wealth creation itself! Currently, they are doing it by setting up auto-debit for their mutual fund investments closer to the date when their salary gets credited. Moving forward, they will be able to set-up triggers for automated investing throughout the month based on the transactions in their linked savings account.
10. Set monthly automatic Deduction for Investment
Prevailing financial wisdom says that money you never see is a lot harder to spend. Set up a monthly automatic deduction of anywhere from Rs. 5000 to Rs. 10000 to go to a specific savings account. After six months, take that money and invest it in a mutual fund. In a few years, you’ll be sitting on a nice little nest egg.