Advice to Millennials: How to Prepare For Unplanned Expenses?

Millennials often feel that budgeting is difficult and it is tedious to prepare for unplanned expenses. However, this oversight can spell trouble when we do not manage our money properly to meet our needs and wants.

Looking to have the latest fashion, gadgets or even going on luxurious overseas trips? All these treats seem affordable as we enter the professional world and start to earn a decent income.

Yet, it may not be the wisest choice to live paycheck to paycheck. In a recent survey on the millennials of ages between 18 to 30 in Singapore, the “Mo-Ments” team from Nanyang Technological University (NTU) found that only one in three young adults here often plan their expenses, while less than half of them frequently set aside money for unplanned expenses. As such, many of us may not have enough money to tide over unexpected emergencies and this can also hinder our financial health drastically.

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The team discovered that many people in their target group are not committed to good budgeting habits because a large number of them struggle to maintain the effort. The top 3 barriers that millennials are found to be dealing with include:

1. A lack of discipline to sustain the habit

It is always easy to give into temptation or peer pressure. Imagine that you have just received your paycheck and your friends invite you to join them for an overseas trip. A quick decision to splurge on the trip may just deplete the sum of money you were going to save for your emergency fund.

2. It takes too much effort to stick to your plan

Changing your spending habits can affect your comfort, convenience and even irks your social circle with a potential nickname of “cheapskate”. In short, it is a hassle to stick to a rigid budget in the long run.

3. It is difficult to overcome the urge to spend

We are constantly surrounded by advertisements and promotions. It is little wonder that we will make a purchase whenever we enter a shopping mall!

So What Can You Do?

With the recent price hike in Singapore, this is definitely a good time to review your strategies and prepare for unplanned expenses. Money management can be simple if you have a clear strategy:

1. For starters, you can create a budget plan and eliminate your doubts.

2. Next, develop a good relationship with your money. Be conscious of the role of money how you feel towards money by asking yourself a series of questions.

3. Finally, you can protect your savings and grow some of your wealth by investing. Savvy investments can help you to gather wealth and protect your loved ones in the long run.

For our readers who are still in school, you can keep a lookout for the “Mo-Ments” campaign that features students’ stories and bite-sized tips on money management. Driving this initiative across different universities in Singapore, the “Mo-Ments” team hopes to spread awareness of making deliberate finance decisions among the college students.