By now, it’s clear that millennials have a different approach to saving and investing compared to previous generations. Recent data shows that millennials are saving more than ever. Despite this positive trend, many millennials still feel financially behind compared to their peers and are managing significant debt while trying to balance both short-term and long-term financial goals.

Here are 5 simple ways to manage your money wisely:

Plan, Prepare, and Persist

Having a solid financial plan is crucial. List your expenses in order of priority and address them one by one. What goals do you have? Identify your short-term, medium-term, and long-term goals, and set timelines for each. Allocate a budget for every expense. Consider consulting a financial advisor to help you plan and build a portfolio that matches your goals and risk tolerance. If you prefer to manage your investments yourself, improve your skills by taking courses, ordering online classes, or enrolling in programs that can enhance your knowledge.

Diversify Your Investments; Don’t Avoid Stocks

Choose the right mix of assets based on your risk tolerance and goals. Include a variety of investments, such as stocks, stock funds, bonds, bond funds, and other types of deposits.

Investing in stocks and equity-based instruments is one of the best ways to protect against inflation and grow your money over the long term. Set up a systematic investment plan (SIP) to develop a habit of regular saving and build financial discipline. Effective financial planning involves not only regular investing but also reviewing your investments periodically, as your goals may change with your lifestyle and age.

Don’t forget to gradually increase your contributions over time, especially in line with any salary raises or bonuses. Also, include tax-saving strategies in your overall financial plan.

Build an Emergency Fund

Don’t let unexpected expenses drain your savings! It’s easier to plan for known expenses than to prepare for unforeseen events such as job losses, medical emergencies, or other unexpected situations. These events can quickly deplete your savings and derail your financial plan. It’s wise to have funds set aside specifically for these kinds of emergencies.

Pay Off Debt and Use Credit Wisely

Debt is one of the biggest financial challenges for millennials. Your first priority should be paying off your loans. Make a list of all your outstanding debts and prioritize them. Once you’ve paid off your debts, redirect those payments into your savings and watch your wealth grow.

Using credit responsibly is an important part of a sound financial plan because your credit score affects your ability to make major purchases. Be sure to pay your bills on time and try to keep your credit card balance well below its limit. Use technology and tools to help you avoid credit pitfalls.

Start Saving for Retirement

The best way to ensure a secure retirement is to start planning and saving early. Just like the early bird gets the worm, starting your retirement savings early allows you to take advantage of compounding over time. Depending on your current lifestyle, calculate how much you will need for retirement and start contributing accordingly. A key strategy is to invest regularly in equities through a systematic investment plan (SIP), which can help you build a substantial retirement fund over the years.