A lot of stress is placed these days on the importance of financial planning for professionals, businessmen, and even housewives. However, it usually takes longer than one wants to start taking financial planning seriously and get down to working on the essentials.
Most people are too busy with building their careers in their 20s and driven by a go-getter attitude that they tend to forget about the larger picture. As a result, it usually remains neglected till one is well into his or her 30s or even nearing 40 before one begins to think of future financial security and long-term financial concerns.
This can hurt one’s interests in the end because a lot of financial planning takes time to fructify, and latecomers have an initial disadvantage to deal with. It is critical to understand that the earlier one begins to plan one’s finances, including even pensions, the better are the chances to maximize their savings and investments’ financial potential.
Here we would look at some of the ways millennials and young adults can chalk out a plan to begin their financial journey well ahead of their peers and make the most of it.
Look Beyond Traditional Financial Advice
It has been a constant irritant for millennials to get turned down by Independent Financial Advisors (IFAs) because they simply do not have enough money to either afford the professional advice or to invest. In either scenario, there are several growing digital platforms and apps that millennials can turn to when in need of financial advice and, even more importantly, to plan their financial future.
One of the significant problems that millennials face when it comes to save or invest is that a big chunk of their earnings tends to be from irregular sources. These inconsistent sources can include all sorts of gigs that have become popular in the past couple of decades and freelancing, which was not that big a thing earlier.
Opt for Digital Platforms and Apps for Investment Guidance
As some of the work paradigms are challenged, millennials must also embrace the paradigm shift in their financial lives. Earlier, conventional weekday jobs were the mainstay of the workforce, and job stability was not that much of an issue, but everything has changed now.
There are many things millennials have to contend with, from repaying student loans and wage-related issues that plague the economy. There has also been a sharp reduction in homeownership levels in the UK, and self-employment is rising. This also means that unemployment is more common for millennials. When needed, they might look for specialized loans for the unemployed from direct lenders who only charge higher interest rates.
Amid this seemingly chaotic situation, digital platforms and apps offer a ray of hope for the younger generation by providing state-of-the-art advice for as low as £1. Many of these automated and Robo-solutions use artificial intelligence (AI) and offer personalized advice based on specific algorithms to meet the millennials’ increasingly complex demands.
Acorn and Mint are two of the finest digital platforms that offer an in-depth financial analysis of earnings and expenses cost-effectively and help invest for sums as small as £5 in investment portfolios selected by the user. Their analysis is based on debit and credit card expenses, existing investments, and micro assets to develop personalized advice.
Focusing On Early Retirement Needs
A growing number of millennials are looking to retire early, even as the trend picks up pace in the generations preceding them. Witnessing a rise in the number of people retiring today at 40, millennials are only looking to up the ante by retiring much earlier. This requires a specialized focus on post-retirement needs and spurs financial growth that makes early retirement a lucrative prospect.
The key to successful early retirement is to understand that it is not meant for everyone. First, you need a highly successful career as a professional or entrepreneur or even as an investor. To do that, one needs to begin with the basics and begin early. That brings us back to the basic premise we started with, the importance of early financial planning.
Millennials might feel like they are forced to contend with a million issues that were not there before, but on the brighter side, they have even more growth opportunities at their disposal like never before. By focusing on their financial future and developing an intent to plan things like saving and investment from early on in their professional lives, millennials can well be on their way to carving an enviable financial future.