Personal Finance for Millennials

Your economic security does not lie in your job; it lies in your own power to produce – to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth. – Stephen Covey

 Over the years of changing generations, the millennials have advanced the basic meaning of work through various economic and corporate trends. Each individual – in today’s time – faces hardship in stabilizing and balancing their wealth with personal life, which is why it is essential to gain ascendancy over your personal finances and wealth.

The exercise of the principles of finance to follow-up monetary decisions of an individual or a whole unit is called personal finance. This focuses on righteous spending, saving, budgeting and other financial activities with variant monetary resources.

Why is Personal Finance Important for Millennials?

  • To create wealth and value your net worth.
  • To avoid, annihilate and eliminate debt.
  • To track financial budgets.
  • Helps you expand your horizons to discover various financial opportunities.
  • Better understanding of accounting, tax and legal formalities.
  • Helps you attain your best interest.

 

Following are certain guideline one is advised to adopt in order to set personal finances right:-

 1. Draw A Line

It is very important that you understand of where to draw a line with your personal finances. This means realizing the aberration between investments in personal assets and business investments at individual basis. A prospect and young entrepreneur should never adhere their future and potential to the success of companies they work in. You should not hesitate in investing a part of your finance to follow your passion if you maintain financial security. Self-employed Millennials should aim at constituting miscellaneous and long-term invested portfolios that help them grow beyond a comfort zone because financial planning is not just limited to numbers – it should help you build yourself with ardor.

2. Maintenance of your Books

Business is all about risks, but do you know the biggest risk of all? Not taking any. In the process of building your organization, you tend to follow-up higher and heftier projects, charter more workforce and so, you have to be efficient enough to maintain competence and expertise. It is vital to address minute details along with achieving goals. For instance, the financial management of your company, i.e. a well-structured and methodized budget, should meet the required needs and smoothly help the organization pass the tax season. Top-quality accountants and financial advisors are the pillars of this financial management; they utilize avant-garde technology to keep a record of assets whilst providing personalized guidance like deploying more capital in certain areas or cutting back costs.

3. Formulate a Disciplined Savings System

Financial security and independence is an esteemed ritual in every Millennial’s livelihood. For instance, every time your business generates revenue – pay yourself a portion of proceeds. The capital of your company is utilized in payment of bills, debts and salaries. While on the other hand, when done with the management of these accounts, a portion of fixed amount to yourself can allow you to frame your personal budget and uniform long-term savings plan.

4. Hire Professional Advisors

To help meet primary and basic planning requirements like integrating a saving schedule for personal budget, Millennials are required to contend with more and forthcoming financial needs of their businesses. You need proper and expert guidance to undergo and take financial and economic decisions.

Henceforth, Personal finance helps accede high-financial literacy for Millennials and thus, should be followed for a productive future.

At SBS Fin, our financial fitness expert Rashi is on a mission to spread Financial Literacy and Physical Fitness for the millennial generations. She is a financial coach to many startups of the millennial generation and is also spreading awareness about Physical Fitness as one of the mantra for Financial fitness. SBS Fin is regularly engaging its clientele in educative events about health & lifestyle to pursue their goal of maximizing avenues for financial fitness among the millennials. You can reach Rashi through the contact form or email her on, rashi.bhargava@sbsfin.com

What’s your plan to enable a smooth retired life for your Parents?

In India, the kids have always been considered as the ultimate investment for your retired life. We can call it societal norm, peer pressure or the way families have been run & managed since ancient times when there was nothing like social security, pensions or facilities for that matter.

What still exists however it the fact that to secure the future of the kids, parents constantly try to give their offspring the best and therefore they end up risking their own future. Be it the education of children, weddings, settling them off with a house or a business – the Indian parents are mostly found without a proper and well managed plan of retirement.

The reason why having a retirement plan has become so significant is our expenditures are on arise, the lifestyles have evolved and therefore the expenses related to lifestyles. Our generations spend a lot on gadgets, some of these were not even in the market until then. When you are young, you ought to spend a major chunk on the extracurricular activities of your children, you also invest hugely in aesthetics – be it for your car, room, office or home. Some of these expenses were almost non-existent 2-3 decades ago when our parents should have planned for their retirement.

All of the above reasons make it all the more significant to Invest or to Help your Parents Save for Retirement. Here’s how we can do it:

Start now!

Do not wait or contemplate about the timing. Start the conversation now and ask your parents if they have any plan on how to handle any expensive emergencies or explain how this conversation can really help.

Tip: Try and do it for both sets of parents to avoid any sort of resentment between you & your partner.

Prepare & Have an Agenda for Conversation

Like our parents, we also sometimes overextend our planning and lose out on other financial goals. Set aside a clear agenda and see if theirs and your emergency fund is enough. The basics of this conversation should be to know the following:

Long term care insurance – What policies do they have for health, pension etc.

Retirement Funds – Know if they have invested in any long term ELSS, maintaining any liquid funds etc.

Mortgages – Check on their mortgages. It is very important that they have all mortgage free assets as it provides your parents with peace of mind.

Debt – Suggest them to keep a check on debts be it their credit cards, self-help groups or to any members in the family or friends.

Will and Estate Planning–The idea is not to grill your parents on what they plan to leave for you but it is to make sure that they have properly planned for their estate. The simplest and very basic check for the parents in India would be, Is your Mom a nominee on your Dad’s bank account and vice versa?

Check all the Documents – See and make sure that all their documents are in good state, well organized and arranged.

It is understood that the above mentioned things make it very uncomfortable topics to be discussed with parents especially in our country but you can make them understand that it imperative for them to better enjoy their retired life.

Why it is so significant?

Remember, your parents might have been saving for retirement ever since your birth and may be a little after that but the chances are that they must have exhausted a part of all of it in your educational spend, an extra course that you were keen on taking or may be the destination wedding that had become your dream of life. They did so to give you the best and most of the parents want to manage their own expenses always.

Through this you can help them set their Retirement Goals upright and guide them to plan their retired life better. And in case, you find it all the more difficult – speak to your Financial Advisor and seek help as to How you can help your parents through their retired life?

Contact us for any queries or feel free to write us, contact@sbsfin.com