14 tips for millennials to navigate finance, investing and retirement planning

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Millennials have unique financial challenges and opportunities compared to previous generations. Many are burdened with student loan debt, face rising living costs, and have limited job security. However, they also have the advantage of time on their side for long-term investing and retirement planning. Here are some tips for millennials to navigate finance, investing, and retirement:

1. Start budgeting:

 Creating a budget is a fundamental step in managing your finances. Start by listing your monthly income and expenses, and categorize them by essential and non-essential expenses. This can help you identify areas where you can cut back and save money.

2. Prioritize saving: 

Saving early is important for long-term financial stability. Aim to save at least 10-15% of your income.

3. Don’t ignore debt:

 Avoid accumulating debt. Avoid making large purchases that you can’t afford, and prioritize paying off high-interest debt like credit card balances.

4. Start Investing Early: 

The earlier you start investing, the better. Even if you start small, investing early can set you on a path to building a solid retirement portfolio. Investing can be a great way to generate wealth, but it’s important to invest for the long term. Don’t panic when the market dips. Avoid trying to time the market.

5. Take advantage of available retirement products:

 Assess different retirement products such as Mutual Funds, NPS, EPF, equities, ETFs and bonds immediately once you begin your career, or ideally 1 or 2 years after you get a job. Make sure you’re taking full advantage of these benefits. The idea is to plan for retirement early. It’s never too early to start planning for retirement. Use retirement calculators to estimate how much you’ll need to save, and consider taking advice from a financial planner to create a retirement plan that aligns with your goals and needs.

6. Take advantage of tax-advantaged investments

: Some investments can give you tax-advantage and thereby help you maximize your savings and minimize your tax liability.

7. Consider investing in mutual funds:

 Investing in mutual funds can be a great way to save for retirement, especially if you expect your income to increase in the future.

8. Be mindful of the fees, commission or brokerage:

 When investing, be mindful of fees and expenses, which can eat into your returns over time. Look for low-cost investment options and consider working with a financial advisor who operates on a fee-only basis.

9. Stay diversified:

 It’s important to diversify your investment portfolio across a range of asset classes to mitigate risk. Mutual Funds, Stocks, bonds, and real estate are some of the most common asset classes that investors use to diversify their portfolios. Make sure to research and understand the risks and benefits of each investment option.

10. Build a contingency fund:

 A contingency or an emergency fund can help you weather unexpected expenses, like car repairs or medical bills. Aim to save at least 3-6 months’ worth of expenses in an emergency fund.

11. Be mindful of lifestyle inflation:

 As your income increases, it can be tempting to increase your spending. However, it’s important to be mindful of lifestyle inflation and to continue to live within your means.

12. Educate yourself on personal finance:

 Take the time to learn about personal finance, including topics like budgeting, saving, investing, and taxes. There are plenty of online resources like Financial Planning Tools, books, and courses available that can help you become more financially savvy.

13. Consider a side hustle:

 A side hustle can be a great way to earn extra income and boost your savings. Look for opportunities to leverage your skills and interests outside of your regular job so that you can earn some extra supplementary income.

14. Be strategic with your career:

Your career can have a big impact on your earning potential and long-term financial stability. Consider pursuing jobs in industries that offer higher salaries or greater opportunities for growth.

Everyone’s financial situation is different. So, it’s important to do what works best for you. By creating a budget, paying off high-interest debt, building an emergency fund, starting to invest early, diversifying investments, maximizing retirement contributions, and monitoring investments, one can build a solid financial foundation for their future. Remember that financial planning is a marathon, not a sprint. The key is to stay disciplined and stay the course, no matter what the market does.


This column has been written by Narendra KS, a Certified Financial Planner and Leader Financial Wellness at AscentHR.

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