Millennials need to be more cautious and concerned about their financial future in the face of the COVID-19 economic crisis.
Covid-19 pandemic has put millennials in the eye of the storm. The lockdown and ambiguity around it have forced them to pause and evaluate their lifestyle and spending habits. Thanks to the crisis, a generation that believed in buy-now-pay-later policy is suddenly thinking about saving for a rainy day, says Yogi Sadana, CEO, CASHe.
In an email interaction with FE Online, Sadana said that young professionals who face the risks of salary cuts and layoffs are learning to adjust with less money. Over half of Millennials have already experienced an impact on their household income—more than any other generation. He said that millennials’ demand for loans has also grown considerably. “Most of the loans taken by this segment were for the reasons related to paying their rent or other EMIs, covering the shortfall in their salaries and meeting medical emergencies,” said Sadana.
As there seems no sudden end to the pandemic, the CASHe CEO shares tips on how millennials should manage their personal finance during times like COVID:
He said that the millennials need to be more cautious and concerned about their financial future in the face of the COVID-19 economic crisis. “It will be wise for them to follow these simple tips in order to manage their personal finance and help them tide over these uncertain times.”
Though COVID-19 will continue to have a negative impact globally, a few smart decisions may help common people maintain healthy finances.
Re-evaluate your budget: It is important to re-evaluate their budgets and prioritize expenses as per its relevance. They need to clearly define between the necessary and luxury items and take decisions to forego the latter for the time being. It is crucial for millennials to take well-thought off decisions for financial stability until the threat abates.
Take a debt consolidation loan: Clear pending liabilities like multiple credit card bills by taking a personal loan. Opting for a debt consolidation loan is a good option to go for where in you can settle multiple debts by taking a single personal loan. It is important to consider that the debt consolidation should be at effective lower interest than the individual loans in the customer portfolio.
Diversify your income: Relying on a single source of income can pose a great threat to their financial situation, especially if the crisis is preventing them from working. It is important for them to build their skills and consolidate their knowledge, they need to think about how they can leverage those skills to start additional source of income like starting a business or work as a consultant. It will be important to monetize their expertise, and diversify their income sources.
“We need to be aware that here is no going back to normal post this crisis because the definition of normal is most likely to change. They need to best utilize this time to ensure that they are prepared financially for what the new norm will be,” the CASHe CEO concluded.