India is home to more than 400 million millennials (those in the age group of 25 – 35 years) and this generation, as we all know, has access to everything at their fingertip through the internet — be it buying groceries, booking movie tickets or buying insurance. Their interest and aspirations are a little different from that of the previous generations as well. With 2019 beginning, let’s look at some of the biggest aspirations that millennials have today and what they need to do to attain those aspirations form the lens of money management.
The Aspiration Index survey conducted by BankBazaar in 2018 maps the aspirations of millennials in terms of wealth, fame, image, relationships, personal growth, and health. Wealth and health among the other aspirations lead the list. What stands to be noted here is the gap in readiness and aspiration and what steps need to be taken to bridge that gap.
Staying in the pink of health
As mentioned, health is of immense importance to millennials but there’s a significant gap when it comes to ensuring mental and physical wellbeing. Apart from eating and exercising well, a health insurance needs to find place in the financial portfolio. You cannot keep depending on your corporate health cover as it may not be adequate and can deplete your savings. After all healthcare expenses are only going up. There are many health insurance policies available in the market. Compare your options and pick the one with a wide cashless claim network, easy claim process, good claim settlement ratio and adequate coverage. For if your health insurance isn’t as watertight as it should be, it’s money down the drain!
Putting down roots
Buying a house is the top aspiration of millennials today. If you are someone wanting to buy a house, this is a good time to go for it as the stagnation in the real estate industry has led to a huge inventory and the builders right now are offering discounts and attractive offers to clear off the unsold houses.
If you are yet to build a fund for down payment for buying a house, start investing in a disciplined manner through Systematic Investment Plans (SIP) to create wealth over a term of 5 to 7 years. You can always start small and increase the size of your investment as your income increases.
For fame, image and relationships
This category includes aspirations to travel, buy luxury cars or gadgets, have a fancy wedding etc. And all of this requires smart planning. You don’t want to disrupt your other long-term aspirations to accommodate these lifestyle choices. You can attain these aspirations through efforts to fit these choices in your budget and by having a fund to finance them. These are short- to mid-term goals and you can create a fund for these goals by investing in FDs or recurring deposits. To ramp up your returns you can consider bank deposits from smaller, newer banks who usually offer a higher rate of interest. If you find yourself in a position to take higher risk exposure, consider large cap mutual funds.
Set aside an emergency fund
Apart from setting up funds to feed your goals, you need to set aside a liquid fund to take care of your expenses in case you were to be faced with any unforeseen circumstances such as a sudden health hazard, job loss etc. This fund must be worth six to twelve months of your expenses, as it is meant to be an alternative for your income if you were to be put out of action. However, make sure you park this fund in a liquid instrument so there are no exit loads upon sudden withdrawal.
The writer is CEO of BankBazaar.