“Save one third, live on one-third, and give away one-third.”
Angelina Jolie
Each generation has different financial goals. Ironically, Gen Y refuses to embrace the same
reality. From receiving the first salary to their wedding day till the arrival of their first bundle of joy and beyond, millennials continue to be harangued by their parents regarding savings. Millennials, the demographic cohort preceding Generation Z and following Generation Y refers to those individuals who are born between 1981 and 1996. They constitute 47% of the country’s workforce. The Millennials can leverage the resourcefulness of mobile devices, the internet and social media and hence are reckoned as digital natives. Here take a sneak peek at the major aspects for which the Millennials save for while learning about how they save differently from their parents:-
HIGHER EDUCATION
In a contemporary era, education has become expensive. The former generation never
struggled to save money for education as millennials are required to save. Parents of
Generation Y funded for much of primary and high school education but millennials begin
assuming the responsibility for saving not merely for themselves for the higher education
expenditure but also for their upcoming generation.
JEWELLERY/GOLD
In Indian households, gold has always been reckoned as the safety net and status symbol.
Millennials are not completely discarding this timeless tactic to save money, but they have
become more experimental with the entire saving regime by exploring new investment
avenues.
TRAVEL
Travelling abroad for holidays, destination weddings, honeymoon trips have become part of the lifestyle of millennial generations hence millennials do make a provision in their financial
planning for the same.
REAL ESTATE/HOUSE
The parents of millennials had to battle high-interest rates and low disposable income whereas the majority of the millennials look forward to investing in the real estate owing to the higher monthly incomes and convenient home loans.
OTHER EXPENSES TO IMPROVE LIVING STANDARDS
Many millennials have witnessed their parents compromising for myriad things in their lives.
Therefore, millennials do not mind splurging money on electronics, gourmet dining, buying
cars, gym memberships and the list goes on.
The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.
T.T. Munger
WHERE DO MILLENNIALS INVEST FOR THE FUTURE?
PPF & NPS
Millennials acknowledge the Public Provident Fund (PPF) as one of the best tax-saving options with low risks. They also look forward to the National Pension System (NPS) for retirement planning.
UNIT-LINKED INSURANCE PLANS (ULIP)
Unlike Gen Y, millennials are keener to explore and foray into entrepreneurship owing to their risk-taking attitude. Due to the same, they seek plans that can provide them with higher returns despite the involvement of risks. Hence, their go-to option is ULIP.
SYSTEMATIC INVESTMENT PLANS (SIP)
Millennials seem more inclined towards mutual funds over conventional saving methods. SIP
allows one to invest a small amount in one’s chosen mutual fund plan regularly.
EQUITY-LINKED SAVINGS SCHEMES (ELSS)
ELSS is also becoming popular for tax savings and equity is the perfect asset class to chase
returns.
HEALTH AND LIFE INSURANCE
Millennials are more proactive in buying health and life insurance offering them desired
financial security.
SAVING THROUGH FINANCIAL APPS
Millennials are now leveraging the resourcefulness of a multitude of financial apps that are easy to use, comprehensive and feature live track finances.
IIFL MARKETS APP
This app helps to facilitate the investment after you have made your pick.
ET MONEY APP AND GROWW APP
Also known as free personal finance apps, they help manage money from smartphones by
providing additional features like smart money-saving options and expense tracking.
Besides the aforementioned apps, there are many more financial apps that help in studying,
investing, tracking and comparing various stocks.
THE BOTTOM LINE
No two generations can perceive the savings in the same manner as each generation reacts
differently to the socio-economic and financial realities of the times, they dwell in. During their times, Gen X saved their money by investing in post-office schemes, gold deposits, real estate and did saving money leveraging piggy bank. Compared to their parents, millennials too do not lag when it comes to saving. It is just that the way they save money has changed due to the myriad technological advancements and easy access to making online transactions. When it comes to saving, the ultimate key is to strike a balance between spending and saving money owing to a belief that living life to the fullest is as equally important as saving money.
“Many people lack discipline when it comes to saving money. What good is having a bunch of stuff if you’re struggling, in debt, or broke most of the time? So many people put up a front like they’ve got it going on, but they know the truth. They spend all of their money trying to look important, and/or keep up an image. Knowledge is everything! Educate yourself about money, investing, and saving. I encourage you to start investing in yourself instead of things! Set yourself up for a better future and start making better choices. Building wealth takes time! Have discipline. Save. Stay consistent. Be brave enough to change your spending habits. Be wise! Don’t allow money to control you. Strive to have a healthy relationship with money!”
― Stephanie Lahart
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