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Financial expert to millennials: Always think before you spend

BE WISER WHEN IT COMES TO MONEY, INVESTMENTS. Financial planner Henry Ong says millennials have to be financially free first before they can truly enjoy the “you-only-live-once” mindset. He says if you aren’t financially free, you will never enjoy life because you will always worry about your finances and paying your debts. (SunStar file)

MILLENNIALS have the tendency to avoid the idea of investing, not necessarily because they are big spenders but they mostly fail to take the big picture approach.

Most young, working people prefer to live in the moment than plan for their future, and that saving and investing aren’t just part of their immediate goals.

But truth is millennials, or those born between 1981 and 2006, have a greater advantage to grow their money because they have time by their side. Plus, the earlier they invest, the better their chances of growing their hard-earned money.

But according to registered financial planner Henry Ong, many millennials today lack the discipline in managing their finances and the financial foresight that they need to save and invest for their future.

Ong shared his thoughts on the millennial generation’s views towards investing, their common mistakes in money matters and how the young should keep their financial future healthy.

On money mistakes

“One mistake they make is the heavy use of credit card without realizing that the monthly minimum payment will never get them to fully settle their debt. Another is living lifestyle that is not matched with their income status. You need to adjust your lifestyle if you cannot afford it. The perception of many millennials towards investing is very conservative because of lack of financial knowledge. You will find everything about investing risky if you don’t know how to invest. Millennials, being young, should be more aggressive towards investing because they have lots of opportunities to learn and they can always restart whenever they fail because they enjoy the luxury of time.”

On making smart financial decisions

“Millennials should learn how to take charge of their finances as early as they start working and earning salary. Because they are young, they have longer time to save and invest for their retirement. They don’t have to invest all their savings for retirement. They can allocate only a portion of it and invest the rest for personal needs in the future such as spending for wedding expenses, buying own house or investing in small business. The most important that millennials must do to start making smart financial decisions is to have the right mindset first. When you have the right mindset, everything will follow naturally. You will be more disciplined in handling finances. You will know how to prioritize when spending and how to save and invest.”

On the You-Only-Live-Once (Yolo) mindset

“Millennials have to realize that in order to truly enjoy the Yolo mindset, you must be financially free first. If you are not free, you will never enjoy life because you will always worry about your finances and paying your debts. Yes, you only live once and you must live it financially meaningful.”

On financial education

“Millennials must invest in financial education first. They can do this while saving money. Once they know the rules of the game, they can start investing their savings. Millennials should choose the right manner of growing their money since banks and other financial instruments would not guarantee significant returns. Financial experts advise to set money for investments that will ensure that they continue to live a comfortable life in the future.”

Health care

“Before even putting money to any investments, getting a health insurance is a must. The rising hospitalization fees and medical costs usually negate investments especially when unprepared for emergencies. The greatest wealth is still health.”

Life insurance

“Insurance is one of the most important investments people can make as it financially protects their families during unforeseen events like death.”

Emergency fund

“Financial advisors always recommend having an emergency fund that can cover living expenses of up to six months. Having such fund will ensure that investments aren’t touched when emergencies such as job loss or an accident occur.”

Stocks

“Investing in stocks is mostly advisable for people seeking for long-term financial goals as it can possibly offer bigger returns in the long run. If played right, stocks can outperform inflation, ensuring the money invested appreciates in value.”

Priority

“Being a generation of wishful thinkers and goal-oriented individuals, most young people feel entitled to enjoy their Yolo status. So they intend to splurge on luxuries, reward themselves with the latest gadgets and live the life they ever want to lead.”

But while they deserve all these things, they must also prioritize the need to plan for their financial future, according to Ong.

There’s no other perfect time for them to invest and be financially-savvy but now, as they enjoy the perk of having a longer investment horizon.


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