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Millennial Entrepreneurs & Money – 3 Steps Agenda These Tricks will be of great use for youngsters trying to manage money on their own

By Mrin Agarwal

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83 per cent of the Indian workforce would like to leave their job and want to be entrepreneurs – these are the findings of a survey conducted by Dutch human consulting firm Randstad Workmonitor. Millennials are invading the entrepreneurship space in India much more than the previous generations. Gone are the days when it is necessary to join a large company to have a "respectable" job.

However, building a startup is not easy and more so at the start of your career. The journey is quite arduous and many a time, entrepreneurs forget a very important aspect of their life – their personal wealth. Being preoccupied with business challenges, one forgets about one's money, an important factor that helps one lead the life they want.

These days, most entrepreneurs have learnt to get a regular salary from their startup but they still need to focus on various other factors to ensure they have enough to fall back on for their financial needs.

1) Save, Save, Save - Given that millennials would not have accumulated savings, it is important for them to be frugal and try to save the maximum possible. A money diary would help to identify savings opportunities even if it is from small purchases. Similar to the cash burn rate in business, a personal burn rate should be calculated to keep a check on cash flows. As per a report by Deloitte India and Retailers Association of India, millennials save only 10% of their income and the balance is spent on essentials, entertainment, eating out, apparel, accessories and electronic gadgets. Whether you are an entrepreneur or salaried employee, your savings is what you would turn to for your personal needs like buying a house or a car. Some of the savings can also be used to fund your business. Also, in a situation where the startup fails, you would need your savings to live on, while you look for alternate employment. Mutual funds are good savings vehicles. However, remember to choose the right category of funds. Equity funds are meant for long term financial goals above 7 years. For short term goals which are below 3-4 years, choose debt funds. Within debt funds, there are different types of funds which need to be chosen based on your investment horizon. For example, if you have money which can be parked for a year, choose an ultra-short-term fund. For monies which can be kept for 3-4 years, invest into short term debt funds.

2) Stay Away From Too Much of Debt – As compared to previous generations, millennials are known to take more loans to fund lifestyle expenses. Fintech and peer-peer lending companies have had their travel loan portfolio jump by 100-200% in the last few years. However, it is important to build a good credit score in order to access loans, which can be used for business. If you have an education loan, which you haven't paid off or unsecured loans like personal loans, ensure you pay these off at the earliest, as they would affect your credit score. Keep away from loans as much as possible.

3) Seek Professional Assistance - In business, subject matter experts and professionals like lawyers, accountants etc. are hired. Similarly, to help you manage your money better; it would be beneficial to hire a financial planner. A financial plan would make you more objective and can veer you to be personally accountable for your financial actions. For e.g., it is very easy to make large purchases on sales etc. but with a plan in place, you would resist this temptation.

The above steps in managing one's money would help in having one less thing to look at, in an otherwise challenging time.

Mrin Agarwal

Financial Educator, Money Mentor and Founder of Finsafe India

Mrin Agarwal is a financial educator & a licensed financial advisor with an experience of more than 20 years in wealth management industry. She founded Finsafe, a financial education organisation focused on equipping Indians with strategies to handle their money based on goals, growth, and safety. The company has already impacted 30,000 people over the last 5 years of its journey. She also co-founded Womantra, a financial awareness program for women & working professionals to empower them to be truly financially independent.

Before dedicating her expertise towards spreading financial literacy in India, she has served in names like Citibank, Deutsche Bank, Birla Sunlife. She has managed a multi-family office for UHNIs and has an extensive experience in investment advisory and banking services. She has won the CNBC Grand Jury Prize for work done towards financial education & inclusion in the UTI CNBC Financial Advisor Awards 2015 & 2017. Mrin has been interviewed by Zee Business, CNBC, ET Now, Radio One & Hubbis. She regularly contributes articles to print (including monthly columns in Mint & DNA) and online media. She has been a judge on the Zee Business show "Hunt for India's smart investor 2015” and “Sensex ka sultan”. Mrin has also been the treasurer at FICCI-FLO, Bangalore chapter and is a Sheroes Mentor.

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