Individuals belonging to the millennial generation, born between 1981 to 1996, have established their own reputation when it comes to handling finances and growing their income. Gone are the days when individuals are fixated on simply saving their money in the bank. Instead, these young members of the society know very well how to diversify their investments and create multiple streams of income.
A July 2021 survey has found out that 59.8% of millennials are keen and are actively preparing for their retirement with the desire of travelling internationally for leisure as retirees. In comparison to peers from older generations, this age group has started preparing for their financial freedom as young as 23 years old, seven years ahead of Generation X.
With this big goal in mind, we have rounded up four successful habits that millennials are doing when it comes to winning in their personal financial management:
1. Continuously enriching their financial knowledge
The digital space has a lot of informative resources when it comes to finances. In the sphere of YouTube alone, there are numerous millennial finance gurus who provide their followers practical tips on money management and investing. Apart from learning from personalities on the web, according to a 2019 international research, nearly 65% of millennials say that they fully trust their chosen financial advisors when it comes to leveraging their financial habits. Meanwhile those who consider themselves very knowledgeable when it comes to investing still receive guidance from experts. Millennials’ commitment to learning doesn’t just stop in the confines of the digital space. These people are not afraid to reach out to successful wealthy individuals who provide them meaningful insights
2. Building good spending habits
Keeping track of expenses is one tedious task but millennials have hacked their way through the use of spending tracker apps downloaded in their smartphones. Expenditure tracking is a very essential practice in order to successfully allocate income according to the functions they must serve, resulting in higher savings and opportunity for investing. This is evident in a 2015 survey where 75% of millennials declared that they carefully track their spending.
To learn more about expense tracking apps, listen to this episode of the Level Up! Podcast.
3. Setting up a safety plan
Most millennials would make it a goal to establish their emergency fund soon as they join the workforce. Having a safety plan, which is six months worth of one’s salary, provides a person with the peace of mind that when an unexpected job loss or financial emergency happens, they will be able to quickly recover.
4. Investing early and wisely
Millennials know that corporate jobs will never be a forever thing. They understand that having passive income is the way to achieve financial freedom. By investing in the right channels as early as they can, they are able to maximize their earnings and increase their net assets. In a May 2019 report by the Philippine Stocks Exchange (PSE), millennial investors make up 21.5% of the total stock market account holders (amounting to a total of 1-million users). In the sphere of cryptocurrency, on the other hand, about 49% of millennials polled in a May 2021 study, own crypto wallets and are actively trading virtual currencies.
To this date, about 56 million millennials in the world make up the entire workforce. While they earn from their multiple streams of income, their actions when it comes to handling their finances (saving, investing, etc) serve as the oil that fuels the public machine that is the economy and drives it toward economic growth. These exceptional financial habits of millennials prove that, in their own unique ways, they are capable of handling and growing their finances.
Uploan continuously provides members of its partner companies a wide-range of financial wellness training where millennial audiences can learn more about personal finance management. Talk to your HR to know when the soonest scheduled webinar is so you can attend. See you there!