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Top 10 Money Management Tips for Millennials

Written by - Akshatha Sajumon

January 24, 2022 7 minutes

India is seeing a constant rise in the spending capacity of its citizens, especially the new generation or the so-called ‘Millennials’. With easy access to credit cards and various online shopping destinations, millennials are focusing more on spending and less on saving. Like all other generations before them, millennials too require help in managing their money better. This generation comprises 18 to 35-year-olds and statistics suggest that they form about 46% of India’s workforce. 

Most millennials dream of owning a big house, going for holidays overseas, managing a decent work-life balance in tough corporate jobs while achieving financial independence, etc. There is also a growing influence of social media on Indian millennial’s financial aspirations. The question that often arises is, do millennials live a real life? Do they save enough to sustain their lifestyle in the future?

If you are a millennial and are looking for realistic ideas to save money for your future, do read these top 10 tips put together by our experts.

Inculcate small saving habits

Millennials are different from their previous generation with regard to savings habits. Traveling, owning fancy gadgets, following fashion trends, etc often act as a hindrance in following the discipline of saving for long-term plans. Saving a portion of the monthly income before spending can act as a good start towards inculcating discipline around savings. 

Smart tip – Follow the 50-20-30 rule

Under this, 50% of income can be set aside for living expenses, 20% for food, entertainment, and travel. The remaining 30% should be kept aside as savings.

Track expenses

Millennials consider income as being disposable and prefer using it for immediate purposes such as house rent, groceries, dinners, etc. Before they realize it, they could be entrapped in the paycheck to paycheck loop. A sensible step towards adopting smart saving habits is to gain a perspective of spending patterns. This can be done by noting down all expenditures for a certain period. Once a pattern is identified, you can aim towards tracking and cutting down on unnecessary or avoidable expenditure.

Smart tip – Use expense tracker apps

Most millennials are tech-savvy and using a mobile expense tracker app is a smart way to use these skills while tracking expenses. These apps help in categorizing expenses into buckets like food, shopping, and entertainment. The apps can be used to set reminders for bill payments to avoid paying late fees. Splitting and settling bills while eating out, vacations etc is easy with these apps. You can even track real-time spending and avoid impulse spending to get better control of your finances.

Reduce discretionary spending

Millennials who have just started their career or have recently become financially independent must avoid non-essential expenses to begin saving. It is important to categorize spending between essential and non-essential. If left uncontrolled, these expenses can easily wipe off one’s income and may not leave any scope of funds being available for future use.

Avoid unnecessary debt

Since credit facilities are easily available and accessible, many young adults tend to incline towards these to meet their lifestyle requirements. However, this can result in a debt trap and a bad credit score before one realizes it. While walking the path of saving money for the future or for uncertain times, it is best to avoid unnecessary debt like unsecured personal loans or credit card loans. Instead, you must plan your requirements for debt by considering factors like the purpose of debt, repayment planning, availability of funds for repayment, etc.

Set up an emergency fund

Goals such as owning a new car, saving for a wedding or home renovation, require the availability of sufficient funds. These goals can also motivate you to save better. However, what is often overlooked with regards to savings is the necessity of an emergency fund. It is always a good idea to save for contingencies or emergencies, such as medical needs. Even if the emergency fund doesn’t get utilized for any emergency, it will motivate you to keep aside some portion of the available funds that may prove helpful in the future.

Get familiar to mutual funds

Millennials who have not yet started investing often lack the right knowledge to begin their investment journey. Saving money to achieve long-term goals is possible through investments in Systematic Investment Plans (SIPs). Irrespective of your income level, you should aim to keep aside at least 15-20% of the same for mutual fund investments as these can yield positive returns depending on the fund chosen and the investment pattern followed.

Smart tip – Choose a mutual fund as per risk appetite

There are a variety of mutual funds available in the market today. You can begin investing in mutual funds by looking at their risk rating. In most cases, the higher the risk involved in a mutual fund, the better the chances of positive returns. 

Learn basics of the stock market

Many millennials are aware of the basics since it is increasingly becoming part of various curriculums. The basic knowledge of stock markets is easily available and accessible to everyone these days. Exploring the stock market for investment options can help in allocating a certain portion of total income towards investments. Stock markets keep fluctuating, therefore, some knowledge of these can help protect your investment against volatilities. 

Go for insurance

In today’s times, purchasing insurance is very crucial since it provides financial cover in case a situation arises. Millennials must consider having a financial security net by opting for insurance such as health cover, life insurance, etc. Insurance can provide financial protection for your future and also for your family/dependent’s future. Before choosing an investment option, you should learn some of the basics of insurance and choose the right one as per your needs. It is also important to remember that insurance is not meant only for the elder lot. It is equally important and beneficial for younger individuals.

Make some lifestyle changes

The lifestyle of millennials is vastly different from that of the previous generation. Millennials look for several small luxuries in life. However, not all luxuries are bad, certain lifestyle adjustments could help in amassing significant savings in the long run.

Avoid paying only minimum credit card dues

Since credit cards allow users to make payment of the minimum due amount on the due date, users tend to postpone the total dues and use the same funds for other expenses. However, if you want to save money, begin making full payments on credit card dues. This will have a two-fold benefit. First, it will have a positive impact on your credit report and second, you will have better control of your income expense.


India’s changing demographics are seeing younger Indians save less than their parents. While current needs may motivate young people to overspend, it is equally important to consider future requirements such as home, car, etc and save sufficient funds for the same. 


  1. How much should I save every month in India?
    To save for future needs and also cover for any contingencies or emergencies, it is advisable to keep aside approximately 30% of one’s monthly income as savings.
  1. Is it important to save money?
    Saving money today can have positive results such as the growth of future income, achieving future goals, financial stability, etc. It is important to save money since it can also act as a backup for emergency needs.
  1. Why is investment in mutual fund good?
    Mutual fund investments provide various growth opportunities to investors who would like to see their money grow over a certain investment time horizon. 
  1. How do I invest in mutual funds?
    It is easy to invest in mutual funds through the Fisdom app. It can be downloaded on your smartphone before you begin exploring the various mutual fund categories to invest in some of the top-rated funds.
  1. What should I do with my savings?
    You should ensure to invest your savings in various avenues of different risk categories. This will help you to create an investment portfolio and grow your savings over time.

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