Millennials make up a large portion of the population in the Middle East and North Africa. They are digital natives who are connected to a global community. While they are open-minded and have the mind-set for greatness, they are also experiencing significant financial struggles due to the external factors surrounding them. For these reasons, millennials are finding it difficult to save for their future and to secure other sources of income.
Despite being the most educated generation in history, millennials have faced challenges in terms of employment and financial stability. However, many young people are finding ways to succeed through creative thinking and hard work. The side hustle movement is one example of this entrepreneurial spirit, and it is helping millennials to create a bright future for themselves.
Market research company Ipsos conducted a comprehensive survey of millennials in the MENA region in 2018. The survey noted:
1. 61% feel that it was easier for older generations to make money
2. 41% feel overwhelmed by financial burdens
3. 14% of millennials are in debt
There are plenty of challenges that young people face when trying to get an education, start a family, and maintain their quality of life. However, three-quarters of millennials in MENA are optimistic despite these obstacles.
They are finding ways to be more cost-conscious and price-sensitive when they spend money, which indicates that they are adaptable and resourceful. Despite the challenges, millennials in MENA are remaining optimistic and finding ways to succeed.
Because millennials are the world’s largest generation, they have the potential to make a significant impact on the workforce. Even though they may face increased competition for jobs, they can still achieve their professional and personal aspirations with dedication and perseverance. Additionally, financial struggles and a high cost of living may present some challenges, but ultimately will not hinder millennials from achieving their personal goals. Financial planning and stability is vital to achieve those goals.
Good financial habits will enhance the financial lives of millennials.
Financial planning for millennials is vital if they want to weather any economic storms due to unemployment, higher prices, medical costs, or any emergencies that may occur.
The sooner millennials start saving for retirement, especially while in their 20s and 30s, the easier it will be to have more money when they retire in their 60s and 70s.
Millennials can follow these 10 rules for financial planning as they look to improve their quality of life and save for retirement.
1) Start Somewhere
Plan for your long-term and short-term goals. Figuring that out will set the perfect template for reaching your dreams by learning how much money should be allocated towards your goals and for how long.
2) Reduce Your Expenses
Once you figure out your plan, start reducing expenses. Avoid making purchases you don’t need. Rather than go out to a café every day, save that money by eating at home. Look for ways to save on your budget.
3) Create a Monthly Budget
And then stick to it. Don’t waver from your budget unless it’s an emergency. Then start investing your remaining disposable income every month.
4) Manage Your Money
Start to budget for your investing strategy. Begin by maintaining thein which you would allocate extra money for investing, budgeting, and expenses. The 50/30/20 rule means 50 percent of your income goes towards your expenses, 30 percent goes towards what you want, and 20 percent on savings or paying off debts.
5) Pay Down Unsecured Debts
Unsecured debts, like personal loans from banks, credit cards, and bills may come with high interest rates. Pay these first. Then you can start to build your savings more rapidly.
6) Create and Maintain an Emergency Fund
The basic rule for an emergency fund is to save six months of your income for an emergency in case you lose your job or have to find another job due to a medical concern.
7) Live Beneath Your Means to Save More
Rather than buy a newer car or an updated cellphone, wait on those until you have more money saved up in your emergency fund.
How do I create a retirement plan in my 30s?
Even in your 30s, you should consider ways to plan for retirement.
8) Invest According to Your Goals
Ensure your investment plan is in accordance with your goals. Your goals and timeline should be the guidelines and should be aligned with your tolerance for risk.
Ask yourself what lifestyle you want to have when you retire. Do you want the same lifestyle you have now? A better one? A lesser one? Those goals are what you want to strive for.
9) Diversify Your Investments
Diversification over the long term allows you to mitigate any risks. As an investor, you allocate money across multiple like land, stocks, or bonds, and don’t depend on one individual stock or any market volatility. You should avoid investing in trending stocks, making emotional investment decisions, and stressing about the news.
10) Plan for Retirement
Financial planning is important to ensure you have secured your future to reach your goals. Starting early and investing today can create significant returns in the future as you may end up with a very strong income that can substantially help you during your retirement and build wealth. You can benefit from compound interest every year if you invest early.
Start your SmartWealth account by and we’ll help you build a financial and retirement plan that is customized to your needs and wants.