Millennials have been living on a fault line. They have learned how to earn but lack how to retain their hard-earned money. In today’s era, we can see millennials doing great in their careers, but internally they struggle to pay their bills. Even after earning a decent amount to lead a good life, their happiness lasts for a week after getting a paycheck. The reason behind this is no knowledge of money management. Millennials are still in the process of learning how to save money and make money from the saved money.
Job security is necessary for millennials, but in the process of getting a job, they often forget to save money while paying off their debts. In the current era, there is no life without debt. People are bound to take a loan, may it be a housing loan, educational loan, or corporate loan. Managing money between paying debts and handling responsibilities is turning out to be difficult for millennials. But, the catch here is, saving money and having smart earning habits is not difficult, it's just a bit tricky. Here are some smart earning habits that might help millennials:
Mindset on saving: Unlike the old generation, who prioritized long-term savings, millennials do not aim for long-term savings. It can be seen that as much as millennials earn, they tend to spend more than required. According to various surveys, it can be said that:
Millennials tend to spend almost 10% of their earnings on eating out.
Millennials love experimenting with their investing habits without taking advice from others, they rather depend on the internet for it. This has resulted in huge losses for many people.
The more they earn, the more they want to spend, this results in zero growth overall.
To overcome this situation, millennials need to take advice from experts and start believing the facts and theories of financial freedom. A shift in mindset is needed, they need to start thinking about making more money from saved money and additional income rather than spending on lifestyle or other things that currently should not be the priority.
Avoiding debts and fulfilling the current one as soon as possible: As mentioned earlier, debt is unavoidable in the current situation, especially when you are doing the job and feeding a household. But, if we look closely, many things are encouraging the current generation to take on debt for the sake of lifestyle. For example, mobile phones, millennials are enchanted by buying expensive phones. Companies now are offering to buy mobile phones on EMI, these EMI last around 6-18 months. This can be counted as an unnecessary debt.
Millennials should know what debt is necessary for them, and try avoiding the debts aforementioned. Also, after getting their paychecks, millennials should aim to clear off debts as soon as possible by holding all unnecessary spending like too many clothes, eating outside in fancy restaurants, and spending on items that they do not need but just want. This can help them in clearing off debts at a faster pace.
Having a skillset: An expert once said, one source of income is never enough to gain financial freedom. Millennials need to learn this, having job security is necessary as it gives them a fixed income. Whereas one can also try to learn unique skills that they can sell for additional income. In the current era of digitalization, one can work for foreign organizations by sitting at any place. Various platforms offer gigs at competitive prices for budding writers, graphics designers, animators, web developers, and various professionals. Having a side income can help millennials to clear their debts fasters and increase their disposable income. Further, to take advantage of increased disposable income, they can start investing it in good stocks or mutual funds to get good returns.
Learn the art of investing from experts: As we can see inflation is rising day by day, and keeping the money spare in our bank accounts or our lockers won’t increase its value. The only way to increase the value of our saved money is by investing it in the right place. Several experts out there can teach and guide people on how to invest their money. May it be through trading, buying stocks, or simply investing in mutual funds. Investing the money at the right palace can give a good amount of returns, this adds as another source of income.
From the above analysis it can be said that having a secure job is not enough, one needs to learn the art of investing, saving, and spending to prosper in life. The path for Paychecks to Prosperity via Smart Earning Habits for Millennials requires a disciplined lifestyle in terms of budgeting. The first goal to gain financial freedom should be to get rid of debts, followed by saving and investing a bit and fulfilling needs, and then spending on wants. The smart earning habits followed by smart investing habits can streamline the process of financial freedom of millennials in a quick way.