The managing director of a financial company based in Queensland expresses his sympathy to the generation who have grown in a ‘tap and pay’ environment as this convenience only taught many millennials to spend and hindered them from forming a habit of saving.
He suggests they create a budget calculator on an excel spreadsheet that will enable them to keep track of their spending; or open a savings account where 70 per cent of their income can be kept.
“If we look at it, let’s say for example a thousand dollars, they put 70 per cent away, [they still have] three hundred dollars in one week and that would be enough to live off.”
Developing the habit of saving is tough work. But Leo shares a simple practice that millennials can follow; he withdraws cash worth two hundred dollars from his account and converts it to ten dollar notes. The purpose of this is whenever he takes out these ten dollar notes to purchase something, he can monitor if he is spending money easily.
Another advice to take from him is to think twice in purchasing products by asking if you really ‘want’ or ‘need’ it for yourself.
Credit cards is a big ‘no-no’ as well, according to Leo. He says the only good debt millennials should get is bricks and mortar - an investment in property or their first home - as this equates to value.
Millennial savings Source: Pixabay
“If you don’t take charge of your finance while you’re young, you’re not gonna ever get financial freedom,” warns the financial adviser among millennials who are into credit cards, car and personal loans.
Leo explains ‘financial freedom’ as the time when a person can spend whenever he wants. It is about proper spending, saving and investing at a young age through to the next 10 to 15 years to bring them to a financial security where cash flows are coming in from their investments or businesses.
“When you have cash flow coming in that’s not just from your work but other means like businesses or investments, you now have free time – and when you have free time, that’s financial freedom.”
Leo shares it is important for millennials to save for the long term now because they cannot rewind the clock and get back the time. Today, they are in an advantage because they are fit, healthy and have all the energy to work and invest on something tangible. He says, “If you waste 10 to 15 years of your life and you get to the age of 35 or 40 and you haven’t had the discipline at a young age, you cannot get the time back; you are now then running around trying to catch up in time because you didn’t have good financial sense when you’re young, that’s why it is most important, you cannot bring back time.”
Pink Piggy bank money concept on dark blue background, stuffed with Australian cash. Source: Getty Images
