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Highlight: Millennials in the 21st Century find themselves in a confusing phase, with new things popping up every now and then, making you question your every move and decision.

Saving money for retirement or not spending lavishly on clothes, Millennials love not to think about the future with their cool abbreviations like FOMO or YOLO. Yet, when it comes to thinking about your future in a realistic way, they tend to blame everything except themselves for not using their money effectively.

However, one thing that millennials say about healthy financing is quite true, which is, “I’m not a financial expert, so how can I make good decisions in that area”. 

Well, that’s correct. Nobody is an expert on personal finance and money-saving truly.

 But you don’t have to be an expert to save money or make good economic decisions in your day-to-day life. Some simple, easy, and long-held truths about personal money management will do you more than enough to steer clear of an empty pocket and unhappiness.

Here’s a list of the most common mistakes that millennials need to avoid:

1. Assuming the Little Expenses Don’t Count

Now don’t tell me you haven’t done this. We’re all guilty of saying at least a few times in our life, “It’s only a few dollars right, no big deal.” The problem is, it is a Big Deal!

We all tend to make fools of ourselves when we say that taking a cab home or a coffee on the way to work won’t break our bank. The reality is they all add up. The old saying of – saving every penny every now and then doesn’t harm our lifestyle really but does make the future a lot better – is true.

Take a minute, think about it. You might not consider spending $5 on a cup of coffee, but if you do that five times a week, that adds up to $1300 a year. That’s a lot.

2. The Idea of No Tomorrow

The biggest mistake you can make as an adult is postponing to save for your retirement. When you’re just starting out in a workplace after college, the thought of financial savings for your old age may seem outrageous. However, due to the nature of investment growth or compound interest, putting a little aside every now and then becomes a lot later down the line.

However, if you join this train of thought too late, then you’ll have a mountain full of needs to overcome in your old age.

But you might say that you don’t have any money to save. Believe me, you do. Even if it’s a couple of cents or a few dollars here and there, it will make a lot of difference in the future.

3. Ignoring your Credit Score

Back up now, a Credit what? Well, my friend, let’s have a quick lesson about credit scores, shall we?

A credit score is a 3 digit number that reflects how likely you are to repay a debt. Banks and money lenders use this score to decide whether or not they’ll grant you a credit card or a loan.

Your credit scores show how often you make on-time payments and how many good-standing accounts you have. For example, if you’re constantly missing your car payments or hitting defaults on your student loans, then it’ll negatively impact your score.

It’s like a battery indicator but for your financial health, in simple terms.

Scores usually lie in a range of 300 to 850. The higher the score the better.

It is one of the primary factors that banks and lenders look at when trying to decide to give you a credit card or a loan. Bad credit? Then bid goodbyes to your amazing home or car that you thought to buy with your credit.

Hence, a great credit score makes a man happy, healthy, and some more.

4. Making Little or No Investments

Sometimes keeping up with our loan payments is all we can do. However, it would be “wiser” to make investment a priority. Anyone introduced to the idea of the investing process seems to be overwhelmed by the sheer complexity of it and thereby leading to skipping it entirely, which is understandable.

But if you hang just for a little bit longer, you get to know that investing doesn’t have to be hard. If you start looking at some super simple funds and make your way up from there, then you’ll definitely know that it works.

5. Neglecting Health and Life

No amount of money or wealth is worth sacrificing your health, life experience, and relationships for. Even though it is understandable to work really hard and try to utilise your youthful energy and vigor to your advantage, neglecting family and health might lead to stress, anxiety, and frustration from your everyday work.

Thinking that money comes first and rest comes later is perhaps the most common mistake that millennials make.

Unfortunately, no matter how invincible you might think yourself to be just for your age, it does bear its consequences. Working 70-80+ hours a week non-stop might increase your output and efficiency, but could also substantially deteriorate your health and relationships just as fast.

6. Spending Frivolously

If you’re young, planning for your future isn’t an inherent idea that would easily intrigue you. Perhaps, living in the moment, what millennials call – YOLO and FOMO – might sound more appealing to you. But reaching financial freedom isn’t that easy if you keep spending at the rate of your earnings.

Just because you suddenly got a big bonus or a promotion, you don’t have to buy a new car, go for an exotic vacation, or buy a bigger apartment. Instead, stay ahead of your existing debt(s) and focus on the bigger picture.

With just minor adjustments here and there, buying a new house and early retirement might become a reality after all.

7. Tying the Financial Wedding Knot Too Soon

The Knot Real Weddings Study in 2018 showed that married couples spend an average sum of $33,931 on their weddings alone – which is far from the overall expenditure with their partners.

Starting life and home with another person is expensive and becomes even more so after your family expands with children and a house mortgage.

Research suggests that millennials tend to get married early and buy their first home too soon.

If you’re not financially confident to start your independent life, then you shouldn’t feel bad about not making such decisions soon, rather focus on the moment and make your financially stable first.

Bottom Line

Money doesn’t fall from a tree, and nor do you find it in a treasure chest deep inside a dark cave. All of it depends on how self-conscious you’re about your living expenses and future decisions.

If you follow some good and healthy financial advice, and efficiently manage your earnings and expenses, then you’ll rest assured, be perfectly fine and reach your optimal future full of happiness and sunshine in no time.

Taking loans at the right time might just solve all of your financial problems including house and family expenditures to credit scores. That is why Fibe is such a good fit for your money-related needs, as it offers the ultimate solution to all your financial needs, be it shopping, traveling, paying bills, or anything else. It offers instant loans and personal loans catered specially to your needs.

Just remember to keep the previously mentioned things in your mind and do some research, maybe hire a financial consultant to manage your money, anything that makes you fully sure about the safety of your future.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs!

Download the instant loan app here, and be a part of the #OneInAMillion experience

Highlight: Become financially independent by managing your first salary! Learn healthy saving habits and stock your nest egg.

Getting your first salary can be almost an intoxicating feeling. All you’d want to do is to splurge and spend on things you have wanted to—with your own hard-earned money. Once the euphoria starts to wear off, you get back to thinking about your future and save. To be financially secure must be your top priority. The sooner you begin saving and investing your money, the greater the returns – with increasing age comes greater responsibilities.  

So, if you’re a newbie to the workforce, I know what you’re thinking – that you’re so broke right now, you’re just trying to get by. We feel you. But we’re here to tell you that many of the seemingly small money decisions you make today can have a big difference in your long-term financial future. Here are five ways on how to put your first salary to work and make the most.

5 Wise Tips For Your First Salary

• Get yourself insured

The primary purpose of insurance is to cover risks in your life, not offer returns. Most people mistake it with investment because of the products in the market that furnish both. The earlier you get it, the better. Over the years, medical costs have been rising, and a health insurance cover is a must-have now. If you have no pre-existing diseases and are young, you pay a lower premium. If you have financial dependents, get yourself a life insurance policy. It offers you a comprehensive cover for a small premium with no returns but is eligible for tax reductions.

On the other hand, health insurance premiums are also eligible for a tax deduction. The broader catalog includes a basic indemnity plan, covering hospitalisation expenses for an individual, along with the family floater plan for your entire family.

• Debt Clearance

While you are growing your savings, you should concurrently look at the debt you have accumulated and repay. 

You might have some being heftier than others, like credit card debts. It’s a simple formula: start with credit cards, then move on to student loans.

Card debts tend to incur a 42 percent interest rate p.a (a much higher rate), which are unsustainable if allowed to snowball.

Calculate repayments for all your debt and set aside this money on a monthly basis to ensure you do not default on payments and suffer additional interest charges. Securing free cash is the only thing more important than paying off all your debt. Pay off these debts first, as they have the potential to cause you financial ruin. Use your excess savings by opting for making partial or complete repayment of your high-interest-bearing loans. 

Student loans are also typical debt everywhere. Payment for such loans usually starts as you graduate and may take quite a few years to clear. 

• Improve your credit score

During the early years, you get used to the good feeling of earning your own money and spending as you like. It might result in a tendency to revolve your credit card dues or delay payments without thinking through the consequences. Avoid maxing out your credit cards and learn to live within your means. These can affect your credit/CIBIL scores and hamper your ability to take out a loan when you’d require it. Try and steer clear of revolving credit or using the EMI option/cash withdrawal wherever possible.

At Fibe, we look beyond just CIBIL scores to assess your creditworthiness.

• Start Investing

I know it’s very dull to think of buying an insurance plan for you amid you having many programs ready in the store. But buying insurance is of massive importance for youngsters at this stage of your life because the earlier the better. So, get your health insurance today because you never know when a medical emergency may come knocking at your doorstep. By investing early, you also let your financings have more time to ride the ups and downs of financial markets, which can be labile.  

Always take a diversified approach to reduce risk when investing—dividing your investment money into different asset classes – that are not correlated, where price movements in one investment do not affect another, where price movements in one investment generally move in the opposite direction. 

This helps if one asset does not do well, as other assets within your portfolio might be able to help cover the loss. 

And it should not only be confined to health insurance but buying life insurance is of utmost importance.

• Save for an emergency

Are you caught in the thrill of making money, buying things, or saving for bigger goals like a house and a car?

So, build an emergency corpus – that is what you’d want to do first thing, way before saving for smaller, short-term goals. This should be equal to 3-6 months of your household expenses and include any loan repayments and insurance premium obligations. The amount should be easily accessible at the time of need and not subject to market fluctuations.

You could opt for a short-term debt fund, liquid fund, or a sweep-in bank account for easy availability and a higher rate of interest for your money.

Final Words

Maybe, at the moment, you are enjoying most of the time without having any systematic plan. But if you get yourself to follow even one of the things mentioned above, you will enjoy it throughout your life. Enjoy now or make your entire life enjoyable – the choice is yours to make.

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs!

Download the instant loan app here, and be a part of the #OneInAMillion experience.

Highlight: Are you planning on making an investment to secure your future? Before you begin investing, it is critical to consider a few factors such as investment objectives, risks involved, investment strategies, and so on. Learn how to invest while keeping all of this in mind

Investing your money may be (or rather, is) the most effective way to meet your future financial goals and build long-term wealth. While it can seem overwhelming considering the breadth of investment options available in the market, the truth is – without a proper financial planning process; your money is bound to go down the drain. In other words, you’re going to lose money simply by letting it idle.

As Warren Buffet once said, “Risk comes from not knowing what you are doing,” so there is a need to understand the basics and consider certain things before making investment decisions. 

A well-planned financial process not only frees you from any financial worries but also helps you achieve your long-term financial goals. Now, there might be risks and uncertainties in any financial plan, but the ability to handle and deal with such uncertainties can help you make good investment decisions. 

There are a number of investment options available in the market, from mutual funds and Fixed deposits to bonds and direct equity. However, before investing in any of these options, you should review and revise your financial plan to make an informed decision. In this guide, let us look at a few things that you must keep in mind before investing. 

5 factors to consider before making an investment

• Sketching out a household budget

The first thing you need to consider is your household budget, as it will determine how much money you can put aside for investing. To prepare a household budget, you have to jot down all your sources of income, which may be your salary, rental income, interests, dividends, etc. Then you have to calculate your monthly expenses, which includes groceries, electricity bill, telephone bills, fuel bills, etc. 

After you have a basic structure of your household budget, you can set aside the money you wish to invest for achieving your long-term or short-term financial goals.

• Plan your investment strategy 

One of the most important things to keep in mind before investing is your investment strategy or plan. A pre-planned investment strategy not only helps you identify your investment goals but when and how you can achieve them. 

There is no denying that certain emotions can influence your investment decisions considering current market trends and high volatility. For instance, there may be times when you want to change your investment strategy, such as selling off your assets, because certain areas of your financial portfolio are not doing well. However, if your investment strategy is intended to be long-term, making rapid investment decisions based on short-term market fluctuations can affect your long-term financial goals. Therefore, it is recommended to plan an investment strategy and then act upon it. 

• Consider where to invest your money

You might want to consider different investment options when it comes to investing. You may choose to invest your money in shares and bonds or residential property. One of the benefits of diversifying your investment portfolio is efficient risk management. For instance, if one of your investments does not perform well, your other investments may help to level out your losses. Therefore, it is important to analyse and study different investment options before investing. 

• Know your risk tolerance

Before investing, you should know how much risk you are willing to take because some investment options can give higher returns than others, but you might have to face greater risk. For example, you can enjoy higher returns on mutual funds than FDs, but being market-linked, you can face a higher risk. Decide whether you have the risk tolerance for such investments; taking more risk than what you can handle can eventually make you stop your investment plan even before achieving your financial goals. 

• Know your investment timeframe

Once you have set your investment goals and plan, then you get an idea about how much time it will take for you to achieve the goals. You have to know the timeframe of your investment, whether you are setting long-term investment goals or short-term. Not knowing your investment time frame can jeopardise your financial future. 

Conclusion 

The intent to make an investment decision is good for a secure future, but it loses its purpose if you are not clear about the investment goal, tenure, or where to invest. So even before you start investing, it is always a good idea to consider certain things like why you are investing, your financial goals, how much risk you can handle, etc. These things will help reduce risk and set you up for success. 

Feel free to get in touch with us for any questions on credit, loans, and your instant cash needs!

Download the personal loan app here, and be a part of the #OneInAMillion experience.

Highlight: Being financially literate is not easy, but once mastered, it can significantly reduce life’s burdens. To get started in this field, read the best-selling financial literacy books.

Financial literacy is obviously a critical life skill. After all, it’s your gateway to knowledge and skills to effectively manage your money. In its absence, your actions and decisions regarding savings and investments will lack a solid foundation. On the other hand, financial literacy will assist you in better understanding financial concepts and enabling you to manage your finances efficiently. It will also assist you in making financial decisions and achieving financial stability.

There are many personal finance books available today that cover a wide range of topics. These topics include debt management, wise investing, better budgeting, and a variety of others. Each of them can assist you in better managing your money while also teaching you about useful tools and techniques. Some may be more relevant than others, depending on your specific financial situation. 

With this in mind, here are five of the best personal finance books you should read.

Rich Dad Poor Dad by Robert Kiyosaki

You’ve most likely heard of Robert Kiyosaki’s “Rich Dad, Poor Dad,” but there’s a reason it’s been around for more than two decades. In one of the most successful personal finance books of all time, Kiyosaki shares what he learned growing up from his father and a friend’s father, the latter of whom is referred to in the title as the “rich dad.” These lessons include how you don’t have to make a lot of money to be wealthy, how to define assets and liabilities, and why schools won’t teach your children what they need to know about personal finance. 

The book is a fun story in which the author shares his learning and experiences from his two fathers, one he refers to as the “Poor Dad” and the other as the “Rich Dad.”

The Total Money Makeover by Dave Ramsey

If you need debt management advice, this New York Times best-seller is one of the best personal finance books to read. Author Dave Ramsey introduces readers to his “snowball method” in a straightforward manner. Similarly, he covers a wide range of topics, such as avoiding renting-to-own, cash advances, and credit cards. He also assists you in budgeting for future emergencies, retirement, and college.

Dollars and Sense by Dan Ariely and Jeff Kreisler

The notion that our spending decisions are solely based on logic and education has long been disproven. We now understand that our financial decisions are frequently influenced by emotions and subconscious desires. Readers are treated to the inner workings of the human mind when it comes to dealing with money in Dan Ariely and Jeff Kreisler’s book “Dollars and Sense: How We Misthink Money and How to Spend Smarter.” Ariely, the James B. Duke Professor of Psychology and Behavioral Economics at Duke University, and comedian Kreisler have collaborated to create an engaging read that blends scientific evidence with entertaining real-world examples.

The Psychology of Money by Morgan Housel

In an ideal world, you would approach each decision logically and rationally. However, when it comes to money, ego, emotions, and pride can all get in the way. If you want to manage your money more effectively, you’ll need to overcome these potential roadblocks. And that is what Housel aims to accomplish in his current book, which discusses the psychological aspects of financial decisions. He tells 19 short stories to highlight key points and help you make better financial decisions. Given that Housel previously wrote for the Wall Street Journal, it’s no surprise that this is one of the most popular personal finance books.

Why Didn’t They Teach Me This in School? by Cary Siegel

Siegel, a retired business executive, has a wealth of knowledge about financial management. However, educating his five children about good financial practices inspired him to write his book. The 99 principles and eight-core lessons included can also help you manage your money better. The material is not only easy to read, but it is also full of useful advice and personal experiences. As a result, it has quickly established itself as one of the best personal finance books available today.

You can also read Best personal finance books for 2021 for guidance on personal finance management. 

Highlight: Worried about long-term financial planning? Investing in a public provident fund (PPF) can be a good investment option with many benefits. Learn how you can invest in PPF for better financial planning.

The reality of inflation has everyone thinking about investing their savings for long-term financial planning. In these times of uncertainty, investing in a public provident fund (PPF) can be the best investment option. 

The PPF is a savings scheme for long-term investments as it comes with a lock-in period of 15 years, known as its maturity period. PPFs accounts are comparatively safer for investing and earning a high interest rate over bonds or fixed deposits. Here are all the numbers behind them:

• A PPF account allows investors to invest up to Rs 1.5 lakh every year. 
• The minimum amount that an individual can invest in their PPF account every year is Rs 500. 
• Moreover, investors get tax deduction benefits under section 80C of the Income-tax act, and the final maturity amount is completely tax-free.

Benefits of investing in a PPF account

Here are a few benefits of investing in a PPFs and how it can be a good option for long-term financial planning. 

1. Tax benefits: You get tax benefits at all three stages of investment in a PPF- In the initial investment stage, you get tax deduction benefits, the interest accrual stage, and the final maturing stage. 
2. Safe and secure option: A PPF is a government-backed scheme, which is entirely safe and secure for investment. 
3. Long-term savings: Since PPF has a 15 year lock-in period, you can plan for your long-term goals such as retirement plans, children’s higher education, etc. 
4. Flexibility to invest: You can invest up to Rs 1.5 lakh in a year, and the minimum amount you can invest in your PPF account is Rs 500 every year. You have the option of investing monthly, half-yearly, quarterly, or annually. 
5. Flexibility to withdraw: Despite a lock-in period of 15 years, you can withdraw part of your savings after 5 years. 
6. Open PPF account in minor’s name: If you are looking for long-term investment schemes for your child, you have the option of opening the PPF account in your child’s name. PPF is the best option for your child’s future. 

How to use PPF accounts for better financial planning

Here are a few effective ways to use PPFs for your long-term financial planning. 

1. Invest to earn interest deposits

You can earn annual interest on your yearly deposits. To make the best out of your PPF account, here is what you should know. 

• All your deposits are tax-free, and the interest earned on your deposits are also exempted from tax, which makes earning interest from your deposits in a PPF account a good option. 
• You have the option of making about 12 investments annually. 
• Making a lump sum investment at the beginning of the financial year may not give you good interest. For instance, if you are depositing an investment in January, the interest calculation will be for the months of January, February, and March, which means it will not be credited for the entire financial year. 
• Alternatively, you earn more interest if you deposit your investments monthly and pay on a regular basis. 

2. Apply for loans using PPF accounts

One major benefit of investing in a PPF account is the ability to apply for a personal loans. Here are the requirements to consider before applying for a loan with the help of your PPF account. 

• You can apply for a loan after completing 1 year of investments in your PPF account before the expiry of 5 years. 
• The loan tenure is 36 months, and you have to repay the loan in installments within the specified tenure. 

3. Plan for retirement

The long-term nature of deposits with a minimum lock-in period of 15 years makes for the ideal retirement plan. PPFs offer a high rate of interest compared to other savings schemes such as bonds or fixed deposits. 

You can make a 7%-8% interest return if you deposit up to Rs 1.5 lakh annually. What makes PPF the best investment for retirement is that the principal amount and the interest are tax-free on withdrawal after maturation. 

PPF Investments: Conclusion

A public provident fund is a tax-saving account and a low-risk savings investment scheme backed by the government to earn interest. If properly invested, you can have secure long-term goals for yourself and your family.