Key financial tips for millennials to be financially independent

A common challenge for millennials is increasing savings. Costs of living have continued to rise through the decades, and we’re competing with many other professionals for the same jobs, leading to a lack of a proportionate increase in incomes.

Oct 26, 2018 06:10 IST India Infoline News Service

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Being a millennial has its own pros and cons. These are exciting times we live in, with tech making our life so much easier and exposure to lots of new careers the earlier generation wouldn’t have dreamt of. At the same time, millennials do have it rough. From increased competition across all sectors to dwindling savings and a lack of long-term financial perspective, it can get difficult living a millennial life. Fortunately, some financial tips can go a long way in making life easier.

Here are five such financial tips you should certainly keep in mind:
 
Increase your savings
A common challenge for millennials is increasing savings. Costs of living have continued to rise through the decades, and we’re competing with many other professionals for the same jobs, leading to a lack of proportionate increase in incomes. In order to handle emergencies (or to achieve your financial goals), you need savings. This can only happen once you stop overspending and allocate a certain portion of your income to investments. This will both serve to ensure a rainy day fund, and grow it as well.
 
Take advantage of new assets classes, such as P2P Lending
 
Thanks to the very technology that has made our lives easier, exciting new investment options – such as Peer-to-Peer (P2P) Lending have sprung up. Lending is no longer only meant for financers and businessmen. It is an investment. Those in need of immediate money use these P2P Lending platforms to borrow at a low cost – such i2iFunding. As a lender, you stand to earn anywhere between 12% to as high as 30% via i2iFunding. What’s more – you have complete control over your portfolio – right from choosing the kind of borrowers you would like to lend to, to how long you would like to lend for.
 
Know Your Credit Score
 
A credit score is a number that helps banks know how reliable you are when it comes to borrowing money. The higher and better the score, the more likely you are to get your loans approved quickly. This can be especially important when you’re planning on a big purchase and are in need of funds. While banks can get very selective when sanctioning loans to borrowers with lower credit scores, P2P Lending platforms again come to the rescue – allowing for loans to people with lower credit scores by running comprehensive (and far broader) background checks on borrowers to build accurate profiles.
 
Have a Budget, Avoid Credit Cards
Look at where you are spending your money in excess, find it, and correct it. Always have a budget and know where you may be leaking money. Avoid falling into the credit card debt trap. This can go a long way in assisting with large expenses when the need arises. Plus, it has its own psychological impact in terms of a confidence boost, generated from feeling in control of financial stability.
 
Start your Retirement Savings Early
It’s never too early to start saving for your retirement. In fact, we would recommend starting off on the 1st day of your career itself. Start saving small amounts, grow the corpus, and invest it to let the money work for you.
 
If you plan early, act accordingly, and invest in the right places, you’re already halfway to true financial independence. Follow these simple but crucial financial tips and continue to be more practical and sensible around money-related matters.
 
The author, Raghavendra Pratap Singh is Co-Founder, i2iFunding.com

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