Millennials – they love speed. The speed at which they shop online, drive their cars or browse the Internet. They thrive in the frenzy of their lives. But, how about the speed at which they spend their money? Agree that the Generation Y may know a lot more about technology than their parents, but we are sure they can take some money management tips from their parents.
1. Save for the future
This generation is all about YOLO and believing in ‘living for today.’ It is also fearless – which is a good thing, until it’s about your financial security. When it comes to money and future, it is always better to be a little afraid. Only then will you think of creating a retirement fund. Today, you have a secured life as your parents started financial planning when they were young. It is your turn to do the same for your family.
With Singapore having one of the highest and increasing life expectancies in the world (83.1 years in 2015 from 75.3 years in 1990) as well as a super high cost of living, it is a wise decision to start saving for your future now. After all, who wants to be an unprepared grasshopper in winter?
2. Make a plan
If you want to have a substantial amount in hand by the time you retire, you will need to plan it well. The surest way to save money is through a Regular Savings Plan (RSP) – a plan where you can save a fixed amount regularly without affecting your everyday finances. You can invest in RSP through leading players including Citibank, DBS, OCBC, and POSB.
Alternatively, you can open and start putting money in one of the best interest-earning savings accounts in Singapore. Investing in gold or using your CPF to invest are also wise decisions if you learn the technicalities around it. Always make sure your investments are diversified as no investment guarantees returns and is 100% safe.
Related: 7 Habits of Successful Investors
3. Set up an emergency fund
Remember how your mother had that secret stash of cash she would never talk about? Maybe she still has it! According to most financial consultants, your emergency fund needs to be around three to six months of your expenses. This will ensure that your regular finances need not go for a toss in case there is a huge, unexpected expense you have to incur. Start now.
Materialism – millennials love their super fancy phones, branded clothes, latest gaming devices, and so much more. And they do not restrict their buying. Nothing is ever enough. Now that everything can be bought in a few seconds from your phone, impromptu shopping for unnecessary items has hit a new peak.
Also, hardly any thought goes behind buying luxurious things like a fancy car or a huge apartment. Unlike old-timers, who used to love their simple lives, millennials like us want everything. And everything quickly! Set a monthly budget and make sure you don’t exceed it.
If you’re going to make big purchases and are intending to use an interest-free instalment payment plan, make sure you are aware of these few things.
5. Buy a health insurance
In the race to buy the latest technologies and luxuries, millennials sometimes forget to buy what is necessary. Having a health insurance for everyone in the family is a must. We only wish well for you but God forbid, in case there is a medical emergency, you don’t need to touch your emergency fund or borrow money if you have a health insurance in place.
In Singapore, you can buy five main kinds of health insurances, though there are companies that offer additional options. Study them well and take a call as to which one suits you and your family the most.
Remember how your dad used to relax while reading his favourite book on Sunday afternoons? Now we have too many expensive distractions for weekends. However, reading never goes out of fashion. Plus, it is a hobby that can benefit you monetarily. Yes! There are many brilliant books that will help you become wealthier and wiser. Here are our top picks. And we promise, they are not boring.
So, the next time your mother asks you to use your money sparingly, don’t give her a cold shoulder. We are sure she has a lot to teach you money-wise.
Keep reading the BankBazaar blog for more money tips and clever ways to get the most out of your credit cards.