Basic Money Management for Indian Millennials

If you are one of those millennials for whom adulthood is just better brokehood, capitalism has taken a toll on you. It has not only changed the way we earn and spend money but wants us to spend every rupee in our banks- sometimes even before we earn it. Capitalism serves us a biryani even before we are able to count the chickens before they hatch.

Indian Women Savings Day

We are the land of Laxmi. Every woman is considered as a carrier of prosperity for the family she belongs to. But that’s that. When it comes to money management, they’re kept at arm’s length. Maybe, that is why we needed a special day to bring to notice how financial sexism is the biggest hurdle on the route to equal and absolute financial literacy. The Indian Women Savings day was an initiative of the Ministry of Finance and the National Savings Institute. Their aim was to highlight the contribution of women in the national economy as they were the ones generating household savings. The focal target was the rural population of India where they wanted women to use the Mahila Pradhan Kshetriya Bachat Yojana to its maximum potential by starting small savings- to ensure a better future and so that they could contribute actively in the economy.

At Slangbusters Studio, we took this opportunity to inspire millennials to likewise become financially independent because when it comes to financial literacy, both- the rural and the young remain clueless.


The Millennials

“Oh, the millennials…” If we had a buck or every time we heard that from the baby-boomers followed with a sigh, we might not even need savings. But unlike the popular notion of our procrastination, we are a generation that wants to work for it. We do not mind working for the returns we deserve and we don’t mind asking for it. We are very focused about what we want from life and we follow that passion with laser-sharp focus ignoring what others might think of it.

We are very clear about what we want. We have the instruments- custom to our needs and varied according to our diversity. What we lack is the knowledge of how to use it to an optimum level of personal benefit.

These are not baseless claims. It is very apparent from the millennial targeted advertisements that all financial institutions from banks to insurance companies are campaigning about recently. They know we are working hard for it, mostly underpaid, but we give it our all. We live as the westerners say, ‘paycheck to paycheck’ but we strive for being financially independent of our parents who sometimes raise us as retirement plans.



So then what is the actual problem with us millennials?

To sum it before explaining, we think it’s too complicated. We think savings and investment is a complicated process, especially with the Indian banking processes which seem like they have made it so that a layman would not be able to do it easily. One westerner privilege they have is that they have to deal with one Social Security Number (SSN) that will do for most transactions unlike in India where you have to link it with Aadhar, have a KYC done, have a PAN card, A ration card in some cases and still you might not be able to do it with help from a consultant. (We are not even considering the state-of-the-art-poor security of the amazing Aadhar)

But hey, it is not rocket science. The generations before us did it in a similar manner. Things have not deteriorated much since then, if not improved, and they did not have the luxury of the internet. You do not need an MSc in Economics to be able to do your own finances. The best part is that we are trying to learn. You must have ended up here looking for answers and that willingness is all you want.

The fact that we want to be so independent that we think we don’t need any help is also bothering us. We have a fear of being unprepared during an emergency and the fear of having to ask for financial aid when necessary.

We are also afraid of making bad decisions. Our peers who flaunt of a perfect life on social media want us to have a perfect life too. We think no one makes bad decisions but us. This refrains us from experimenting and learning from our mistakes. The sad part is that instead of doing something about this fear and we end up not doing anything- dealing with the month-end-brokehood on our own.

The Indian culture of parenting provides a cushion for our entire teenage and when we want to become financially independent, a piggy bank is not going to teach us how to save money. The savings from the occasional charity that your uncles and aunts shower you with on Diwali and birthdays will not get you through retirement.



Ask for help

There are a lot of financial firms, consultants and even banks that are more than happy to help you. They take a small fee but it’s worth the return you will get on your savings when the amount matures or when you need it the most.

Do not hesitate in asking for help, it’s literally their only job.

Pieces of advice are how the generation before us, and even the baby boomers got their financial education. Not from schools and universities. Ask a peer, ask the chartered accountant from your parent’s workplace, ask a friend who went on to pursue masters in finance or, just get a consultant to manage your portfolio.

India is one such country where you will get advice from anywhere and everywhere. Some, asked for, and the rest- unsolicited. What you must do is not to follow every piece of advice but, make sure you do listen to all of them.

Your job.

Curiosity is the fuel of our generation and we must always keep the engine running. Take initiatives yourself about learning new things about advances in the finance industry, about taxes and about new schemes for savings that your bank has.

Take online courses, read blogs, for a change, actually read the full document that came with your bank account opening kit.

Have a mentor who you trust but never let go of a small amount of skepticism. You never know when you might make one small mistake to probably lose a lot of hard earned money.

Keep it simple, yourself. Do not try to have your legs in multiple boats at once. Do it according to your financial as well as timely capacity. If you invest too much time in managing investments and savings, you might not have enough time to deal with making more money.

Consistency is key. Savings are not a one-time thing like investments. Learn to manage your income in a way that you start by saving at least 5% of your income after deducting tax and then increase the amount you save every year.

It might seem that it is too early to think about retirement plan when you might still not be sure about what you would be doing five years later. See, no one actually knows what they are going to be doing after five years. What we all know that we will be growing old and will have to retire. We are the generation that will raise kids so that they will not have the financial dependency we have and not as retirement plans. Hence, we will have to start thinking about retirement plans sooner than ever.

We are living in a different era that has a different approach to loans. What used to be something that you must not do without having to hush about it, has become the new norm. To be eligible to take a loan, you must have enough credit score- something that is built by taking loans and paying it back on time. This builds your credit score proving that you are more and more credible, hence, eligible for big loan approvals. Consult your expert about how to build your score.


The SITting SID rule for budgeting.

Keeping track of money is something that we are not experts at. We might not have to live paycheck to paycheck if we keep proper track of our money and have some carry forward at the end of the month instead of having to live on noodles.

Budgeting is what you will have to start doing. The first time might be difficult along with the added weirdness you might feel which is called adulting. No matter how you bad you not want it, it will be a part of your life, eventually.

To stand up on your feet, you will have to consider the SITting SID rule. Which is,

• Salary
• Insurance
• Taxes
• Savings
• Investment
• Debt rule

These are all the aspects that you have to think about when it comes to managing the monies.💸

1. First, out of your total income, excluding the professional tax and PPF and whatever deductions your company makes in your monthly salary, (please check your salary slip for the details) deduct all expenses that you have to make at the start of the month. This includes your rent, monthly groceries, electricity, and other bills, your Netflix subscription, etc. Track all of these expenses and see if you can deduct any lesser.

2. Then consider your savings. Decide upon a particular percentage of your income that you want to save. This amount should be ideally equal to or more than 5% for cash savings and another 5–10% as retirement savings. The cash savings are for good returns and emergency purposes. You can even ask your consultant for automatic saving options.

3. Taxes are considered to be most complex when you want to think about saving on taxes. This can be avoided by small applications such as thinking about taxes when any amount is credited and expenses are incurred. Use GST properly, know your tax benefits and file them on time to avoid extra charges.

4. Debt is another aspect that you have to think about. If you use a credit card(s) keep paying the bill in a timely manner to keep your credit score high and interest rates low on EMIS and any other credit taken. Student loans are not as big an epidemic as they are in the US but if you have any of such loans, timely installment payment is very important before you use the extra income for savings purposes.

5. This is when you think about insurance premium payments. Be it car insurance, home insurance, health or life insurance. If you do not have any insurance, think about at least having health and life insurances because you never know when you might need them.

All of the above can be talked about in detail with your consultant/expert/mentor whom you can ask questions to after knowing these basics. If you have any ideas of creating a platform for such resources, reach out to us. Maybe we can collaborate on something amazing.

Young adulthood comes as a rude awakening but now, it’s time to get shit done and get it all together.

— By Manas Daxini, Content Strategist, Slangbusters Studio