How millennials should manage their finances amid Covid-19 pandemic

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Raima Agarwal, 26, a Mumbai-based content writer is receiving only 80% of her salary as her company is going through a crisis amid the second wave of Covid-19. “After a 20% pay cut, my salary is still enough to live in Mumbai. But it is not just about living. What if any emergency arrives or any work-related investment is required? My parents are always a backup but I want to manage things on my own,” she said.

Most millennials will agree that asking for money from your parents is awkward. The pandemic has pushed millennials to start managing the funds efficiently.

An HR manager in Bengaluru, Sakshi Rawat, 28, agrees that the crisis is getting unbearable in terms of money. “I wish, I would have had savings. I don’t want to burden my family during these critical times,” Rawat said.

During these grim times, Rachit Chawla, CEO & founder, Finway FSC suggests that reevaluating the budget and prioritising expenses should be the first and foremost thing millennials should do. They must distinguish between necessary and luxury expenses and forego the latter for the time being. “A general thumb rule is that 30% of the income should go to savings. However, if that is not possible, save whatever you can. Ideally, your savings should cover you for at least 6 months,” explains Chawla.

Saving a part of your income to attain financial security is important. Start saving as soon as you receive your first paycheque.

“Millennials by definition are those who are in the age bracket of 25-39 as of 2021. In this age, traditionally, we see maximum expenditure on housing, luxury and life events such as marriage and newborn children. This has changed,” Tushar Bopche, product head – AUM Business, Yes Securities said.

“People have seen the kind of help a simple fixed deposit can provide during a time of emergency. For most, life goals are still the same; it’s only the approach that has been recalibrated,” he added.

Millennials should consider diversifying their income. Relying on a single source of income can spell trouble in case of an unprecedented disaster. They can always consider investment options, according to Chawla.

“Depending on your risk appetite, the options are plenty – from dynamic ones like mutual funds to safer ones like real estate and gold. Pick the one that suits you the best. Always consult with a market expert though if you’re a novice,” he suggests.