Generation Y, the key to financial management

Millennials – those born between 1981 and 1996, now aged 25 to 40 – constitute the bulk of young corporate citizens, including entrepreneurs. They work in media, business process outsourcing (BPO), entertainment, banking and finance, hospitality and hospitality, academia and many other industries.

Often shown living in the moment, they neglect any sort of preparation for the future, probably why 36% have no savings at all, and only 38% of these young professionals or yuppies feel financially stable. The good news, however, is that 44% of millennials are also prepared for a tough spot with savings that could cover around three months of spending.

Despite the Covid-19 pandemic, which may have blocked the dreams and goals of this age group also known as Generation Y, reveals millennial attitudes about spending, saving and investing –– financial management in brief –– according to the surveys to which it subscribes. .

“While they’ve often been labeled as materialistic, spoiled, and struggling with a sense of entitlement, the truth is that many millennials believe they won’t be able to achieve material goals like finding employment. of their dreams, buying a house or retiring before much later in life than their parents, “said the world’s leading source for financial content on the web.

In its own survey of affluent millennials, notes that 46% of millennials say they aren’t saving enough money and 39% say they expect to be forced to work past their age. retirement age.

In their analysis, Millennials’ investment philosophy is affected by 9/11 and the 2008 stock market crash, leading to the adoption of an increasingly global mindset, with factors such as accountability. social and environmental frequently playing a key role in where Millennials invest their money. .

“Many of them choose instead to follow their own instincts or follow their peers when it comes to investment choices, and have become somewhat suspicious of the financial advice given to them by their parents or financial professionals. , which they often consider as sellers having their own interests at heart, ”notes Investopedia.

In the United States, a survey by the American Institute of Certified Public Accountants (AICPA) shows that more than three-quarters or 75% of millennials want the same clothes, cars and tech gadgets as their friends and that about half of them ‘among them must use a credit card to pay for basic daily necessities such as food and utilities. More than 25 percent of them have been in late payments and deal with debt collectors, and well over half still receive some form of financial assistance from their parents.

The study also finds that seven in 10 millennials define financial stability as being able to pay all of their bills every month, with differences in financial habits between the sexes, where men feel more inclined to follow their friends in terms of material good while women to be more frugal and put more emphasis on saving money.

Much of the pressure they feel to conform to the financial habits of their peers comes from social media, where financial milestones such as travel, home and car or gadget purchases are regularly posted for all to see. see them and envy them.

Due to the influence of social media, plastic surgery or physical enhancement is another area where some millennials spend their money. Injectables are growing in popularity, and social media influencers frequently post before and after videos online.

Also according to Investopedia, while pay and compensation are still very important to most millennials looking for a job, it’s not always the primary factor that determines the best place to work. They also seek autonomy, respect and fair treatment, and therefore expect employers to be able to provide these conditions in their workplace.

Access to digital information has also made them much more aware of what their peers and superiors earn as well as what they themselves are worth, and their rights and privileges in the workplace. They reflect their investment philosophy in that they want a job that enriches not only themselves, but also the world around them.

In retrospect, their ability to succeed financially will depend on many factors, including economic and political conditions and whether they can overcome the perceived sense of entitlement that much of society has attributed to them.

Tips to protect, boost your income

Many millennials left college just a few years ago, so their minds are far from retirement and budgeting for the future.

Web-based skills information and resource provider points out that while technology has made it easier for millennials to protect their money and earn more, it has also added a layer of complication.

Tools like online trading platforms, money-saving apps, and technology-driven investments like cryptocurrency make it difficult for millennials to decide which is the right vehicle to buy. use to protect or grow their money.

Personal finances can be a complicated subject, but there are some important things millennials can focus on when managing their money. These are insurance, savings, debt and budgeting –– according to SkillsYouNeed.

There can be no financial planning without budgeting. It is essential to have a budget to know the amount of money earned, saved or spent. Budgeting requires a person to take income – whether it is from work, gifts, tips, and bonuses – and then allocate it into funds for different expenses. What remains is determined for savings as these numbers are used to keep spending on track.

Protect your money by saving. Setting money aside to save doesn’t mean that a person has to eat easy-to-cook noodles or just bananas for the rest of their life. That means making smart choices, like shopping thrift stores instead of designer clothes or renting a cheaper apartment instead of buying a home out of budget. Millennials can have a hard time refusing an invitation for fear of missing out. However, the sooner young people learn to say no in a polite manner, the sooner they will reap financial rewards. Moderation is key, you don’t have to be a recluse or killjoy.

Avoid debt. Owning money is inevitable for most people. Fear of debt has caused people to avoid things like credit cards altogether. However, credit cards, when used responsibly, are a powerful tool that can help build credit for the future. The key is to be smart about debt and credit. Going into debt by buying things that are not in the budget is fatal. There are several tools millennials can use, including several apps, designed to track spending and savings. With the use of a credit card, make small, recurring purchases each month, then pay off the balance in full. The mindset should be that if you can’t afford to pay for the purchase in full by the time the invoice comes in, you can’t afford to make the purchase. Never charge more than you can afford.

Protect your wealth with life insurance. Married or single, parent or childless, debt-free or over-indebted, a life insurance policy allows you to meet your financial obligations. It protects loved ones from the need to cover these obligations in the event of unforeseen events such as illness and death. Insurance is the last part of any fundraising plan as it protects loved ones should the unfortunate one happen.

Multiply income with stocks. Investing using reputable stock trading platforms is one of the surest ways to multiply income over time, but only if you invest wisely. This can be difficult for newbies, so seek advice from trading experts to avoid mistakes that could consume even money set aside for emergencies.

Geraldine L. Melton