Millennials. We are the YOLO (You Live Only Once) generation. We live our lives to the fullest; we take one day at a time. We’re wild, young and free and widely criticised for our way of life, and our way with money.

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Our generation tends to spend money we don’t have, racking up huge debt and credit card bills on the way. But we are much better than our predecessors in some ways – as a generation, we are more aware and informed about our lives, our rights and our money.

The fact that we are aware of the existence of mutual funds, insurance and equity investments is a point in our favour. The ‘investment advice’ we receive from well-meaning elders who tell us to put all our money into fixed deposits (FD) is long outdated, and it’s time we decided to pave our own financial future.

4 To-Dos For A Better Financial Future:

To EMI Or Not To EMI, That Is The Question

There was a time when you couldn’t afford something, you couldn’t buy it. EMIs changed all that when they allowed us to buy things we could not have otherwise bought, though easy installments.

EMIs are great when it comes to home loans, which offer good tax benefits. But accumulating too many EMIs is dangerous, as they not only hinder our liquidity but affect our overall credit score if we default on a single one. A good rule of thumb is to make sure your EMIs are less than 30 percent of your net income.

Save Before You Spend

The dreaded b-word – Budget. We shudder at the very thought. But to be responsible with our money, it is essential to put aside some money towards savings, preferably the very day we receive our salary.

The remaining amount can be used for our monthly expenses. Having a separate bank account for your savings and expenses ensure that we can’t cheat and accidentally-on-purpose splurge on an expensive outing.

Beware The Credit Cards

Credit cards are like the beautiful sirens of lore – they entice us with easy money, and lure us to the rocky shores of credit death. By exercising restraint and staying within our means, we can sail towards a happy financial future.

Never rack up credit card debt in your early twenties which can ruin your credit score for the rest of your life.

Put Your Money To Work

Having our money sitting idle is not a good idea. It’s time we listen to all the financial Gurus and make our money work for us. Setting aside around six months salary for an emergency, invest your money into a mutual fund of your choice.

Channel your investments towards specific time-bound goals and bring structure to your investments. Your goals are more attainable when you plan them well in advance. Identify your financial goals and track them over the course of time. Every rupee invested brings your goals closer to reality.

“The fault, dear Brutus, is not in our stars, but with ourselves that we do not invest.”

Niveditha Vishwamithra is an Analyst at Kuvera.in: India’s first completely free Direct Mutual Fund investing platform.

First Published:Sept 6, 2018 6:00 AM IST