Managing finances can be challenging and it is even more challenging for the millennial generation as they prefer to live in the present and care less for future. It is always suggested to protect your money even if you have more. Only a handful of millennials know how to save money and the importance of budgeting. This page covers almost every piece of financial management for millennials. Let us discuss in a few points how millennials can overcome financial challenges:

  1. Set up an Emergency Fund

Life is uncertain and so is our source of income. However, we always overlook the necessity of emergency funds with regards to savings. We might find ourselves in a critical situation in our life at any point. It could be any unforeseen circumstance that would require us to have money immediately. Hence, it is important to keep some portion of your income aside that might prove helpful at the time of crisis. Ideally, one should have a savings of at least two months’ salary as emergency fund. However, having an emergency fund of the scale of six months’ salary can provide an additional cushion.

There might be times when you have exhausted all your emergency funds. In that case, you can opt for pre-approved loan offers that you have or resort to a credit card as your last option. It is also recommended that you must avoid paying minimum dues on credit card and instead pay in full as it will not only benefit your credit report but also help in saving on high interests. 

  1. Start Saving from the Beginning

Millennials are different when it comes to their saving habits and spending. They want to do everything at once, be it traveling, buying a new gadget or following latest fashion trends. Often these things cause an indiscipline when it comes to saving money. It is suggested that you should follow 50-20-30 rule when it comes to spending your money – 50% of your income should be spent on your day-to-day expenses, 20% should be spent on your wants and the remaining 30% should be saved. If you follow this rule from the very beginning, you can have a stable future financially.

  1. Be Credit Ready

There might be times in your life when your financial situation is not healthy or you have no funds with you at the time of an emergency or you might have exhausted all your savings. In that case, you may require credit. Being credit-ready may help you in availing loans with less hassles. You can be credit-ready if you have a good credit score. It shows your creditworthiness to lenders who in turn offer you easy loan options such as pre-approved loans at relatively lower rates of interest and relaxed terms and conditions. 

To know if you are credit-ready, you can check your credit score regularly online through various credit portals and aggregators such as that offers you free credit score every month and stay updated with the available offers.

  1. Effective Budgeting to Meet Life Goals

A very important step to increase your savings is making a budget. A budget plan will help you track all your expenses and will provide you with a brief idea on how and where to utilise your money. You need to have an objective while you make a budget stating your cash flow, liabilities, and your financial planning. 

Once you start making a budget, it will help you track your expenses which will eventually lead to goal-oriented savings. Having goal-oriented savings in your plan is a must because you need to have set goals to meet them as planned. It will also help you make long-term investments.

  1. Prepare for a Retirement Plan

It is never too early to start preparing for retirement especially when it comes to millennials because millennials think about spending more and saving less. Your present financial planning will impact your life in the future when you retire. If you start planning from today onwards, it will put less burden on you when you grow old as you will not be able to work forever in life. Since all of us do not have the security of pension when we retire, we must focus on the investment that will bring us income when we grow old. 

Some ways by which you can start investing to gain results in the future are investing in NPS, pension plans, retirement plans, buying a property and renting it, etc. If you start right now, you will be on track for your retirement years else you will have to invest a higher amount of your earning in later years which might get you in a lot of trouble with other expenses. 


It is never too late to know that financial planning is something that will dictate the way you live your life. It is time to develop a roadmap to ensure that you meet your financial goals and maintain financial stability. Spending your income wisely will help you in savings and build a debt-free future. Following the points mentioned above can help you in becoming disciplined financially and also manage emergencies efficiently in future.

By Manali