Ong: Some millennials lack financial discipline

CEBU, Philippines — Many millennials today, often tagged as a generation driven by consumerism and overspending, lack discipline in managing their finances and have a very conservative stance towards investing.

Registered financial planner Henry Ong said most millennials lack the financial foresight that they need to save and invest for the rainy days.

For instance, Ong cited the heavy use of credit card without realizing that the monthly minimum payment will never get them to fully settle their debt.

"Another is living lifestyle that is not matched with their income status. You need to adjust your lifestyle if you cannot afford it," the financial planner told The FREEMAN in an interview.

Ong observes that the perception of many millennials towards investing is very conservative because of lack of financial knowledge.

"You will find everything about investing risky if you dont know how to invest," he stressed.

Studies have shown that saving and investing are not a top priority among millennials.

Millennials are defined as individuals born between 1982 and 2004 or persons reaching their adulthood in the early 21st century.

'Be aggressive'

"Millennials being young should be more aggressive towards investing because they have lots of opportunities to learn and they can always restart whenever they fail because they enjoy the luxury of time," Ong advised.

The financial planner further urged millennials to learn how to take charge of their finances as early as they start working and earning salary.

"Because they are young, they have longer time to save and invest for their retirement. They don't have to invest all their savings for retirement. They can allocate only a portion of it and invest the rest for personal needs in the future such as spending for wedding expenses, buying own house or investing in small business," said Ong.

Right mindset

Having the right mindset first is the most important thing that millennials must do to start making smart financial decisions.

"When you have the right mindset, everything will follow naturally," he said.

"You will be more discipline in handling finances. You will know how to prioritize when spending and how to save and invest," he also added.

Most millennials today boasts their You Only Live Once (YOLO) belief that they must enjoy their life by satisfying and spending for themselves.

Most of them choose to live in the moment, do things that would satisfy their wants and leave the future to take care of itself.

'Be financially free first'

But according to Ong, millennials have to realize that they must be financially free first in order to truly enjoy the YOLO mindset.

"If you are not free, you will never enjoy life because you will always worry about your finances and paying your debts. Yes, you only live once and you must live it financially meaningful," the financial literacy advocate told the young generation.

To achieve that, millennials must invest in financial education first.

"They can do this while saving money. Once they know the rules of the game, they can start investing their savings," he said.

Ong advised them to invest in some blue-chip stocks in the market.

"They can make it a habit to invest passively first while trying to gain experience. When you invest passively, you invest slowly but regularly. It is like transferring your savings to investing in stocks. When they become more confident because of experience and better knowledge, you can try to invest more actively by trading," he explained.

Perfect time

While most millennials believe that being a single free individual, they are in the desirable position of not having to budget and having enough money to have fun.

But one thing they don't realize is that they're actually in the percent time to be financially-savvy, as they enjoy the perk of having a longer investment horizon.

Therefore, millennials are advised to set a solid financial foundation for themselves while they're young, and learn how they can better manage their finances and their future will eventually be taken care of. (FREEMAN)