5 ways millennials can start saving in 2022

Padmaja Choudhury   /   March 9, 2022

A common misconception is that most millennials don’t save or invest their money. According to a recent study, over 84 percent of millennials in India have a wealth management strategy for their future contingencies. They are also looking for more robust and sustainable growth opportunities in the post-pandemic world.

But who are millennials?

Millennials are individuals who are born between 1981 to 1996. So that means that people who are in the age group of 26 to 41 are millennials. 

If you are a millennial, then there is a higher probability of having already invested in one or another investment option. However, if you haven’t yet started, this year might be the best year to start saving and investing money.

Here are five simple ways to start saving now in 2022

First invest, then spend: If you think you can invest money that is left after taking care of your expenses, you will never have enough money to save or invest. So, reverse it. First, decide the sum you want to save or invest every month and take care of your expenses with the money left after investment.

Avoid lifestyle expenses: Excessive spending on lifestyle expenses can be unproductive. Thanks to social media, online shopping sites, buy now pay later services, credit cards and digital loans, it is now effortless to spend money. The option to convert large purchases into EMIs has increased our spending potential. However, spending without a plan can be harmful to our finances.

If you want to save money, it would be good to reduce lifestyle expenses.  

Follow the 50-30-20 rule: You might be confused about the actual amount of money that you need to invest every month. 50-30-20 rule is an easy budgeting rule that you can utilise to segregate your income into different buckets: needs, wants, and saving/investment. According to this rule, 50% of your income may be earmarked for necessities, 30% for wants and 20% for saving and investment.

Initially, if you don’t know how much you can afford, you can start investing 20% of your income.

However, it is crucial to understand that the 50-30-20 rule is just a thumb rule, a guiding principle. If you can save over 20% of your income, you can do that.

Build an emergency fund: Now that you know how much you can save every month, the first thing you can do is build an emergency fund. Having an emergency fund is extremely important as it can help you during emergencies. Typically, you need at least six months of expenses in an emergency fund. As it might not be feasible to build the emergency fund in one go, regular investments might help. A liquid mutual fund is the most preferred option to park your emergency fund. It is not volatile like equity funds, and you can instantly redeem your money from a liquid fund.

Start SIP for your goals: Once your emergency fund is ready, it is time to focus on your financial goals such as saving money for your marriage, foreign vacation and the most important of all, your retirement.

Based on the time horizon, you can segregate your financial goals into short term and long term financial goals. You can choose a mutual fund that suits your goals best.

However, if you are unsure where to invest and why, you can start investing in a Nifty or Sensex index fund through SIP. These index funds track the underlying securities of the Nifty 50 and Sensex benchmark. As the companies that form a part of these indices are industry leaders, their stock prices are relatively less volatile than other companies. This will help you have an excellent first-time experience in equity investment. You can then invest in other riskier equity funds as per your risk tolerance. 


To make money for your future, you need to make more by investing wisely and spending less on unnecessary expenses. It is possible to do it only if you plan for your goals and follow a smart strategy.

So, now that you know these five steps, what will you do about it? Will you start saving money in 2022?

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