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While millennials (individuals born between 1882 and 2002) might be earning way more than the baby boomers (individuals born between 1944 and 1964) or Gen Xs (individuals born between 1965 and 1979), today’s generation is not better prepared for their future than their parents or grandparents. This could mean that millennials are not prepared for their retirement journey which could have a catastrophic impact in their lives. While your retirement might seem like a distant event, you would be better off if you start saving and investing as early as possible. Remember, the sooner you begin your investment journey, the more easier it would be for in the later stages of life. Remember, the sum you invest currently has the potential to grow at an exponential rate over a period of time. 

Here’s what millennials or Gen Y can do to ensure a smooth retirement era for themselves:

  • Don’t spend too much
    One of the biggest mistake millennials do is living paycheck to paycheck. Even though they earn substantial sum of money, they often go overboard with their expenses.  Work a way to cut your costs so that you can save enough to invest for a better future. Also, mere saving is not enough. You need to invest your money and ensure that they provide inflation beating returns.
  • Learn good budgeting and financial planning
    millennials often have the habit of splurging their income as soon as they get an raise. They think they need to spend it entirely as they earned it. Though, it is true to an extent and you must spoil yourself, but you must make sure that you do not end up spending your entire income. As a thumb rule, 50% of your expenses usually go towards basic necessities such as rent, home loan, electricity, water bill, etc.  Next, you must save and invest at least 30% of your income towards financial goals. You can also take help of a financial advisor who can better plan your finances
  • Get out of debt
    One of the worst mistakes you can make is being a victim to debt trap. With easy and quick availitbility of personal loans and credit cards, millennials often spend more than they can afford. However, they often fail to realise that these instruments charge significantly higher interest rates to borrowers. Thus, one must try to stay away from credit card debts as much as possible. Also, it is a good habit to get rid of your debt and pay your credit cards on time.
  • Invest in mutual funds
    With so many types of mutual funds available to an investor, all investor’s needs can be met through these investment options. You can choose to invest in equities, or debt, or a mix of these funds.

    Whatever type of investment you choose to invest in, make sure that it aligns with your investment objective, financial goals, and risk appetite. There are also different types of investment such as National Pension Scheme (NPS), Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), Post Office Monthly Investment Scheme (POMIS), etc. Happy investing!