{"id":35828,"date":"2018-09-26T15:54:17","date_gmt":"2018-09-26T07:54:17","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=35828"},"modified":"2018-11-09T11:30:22","modified_gmt":"2018-11-09T03:30:22","slug":"robo-advisor-millennials","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/robo-advisor-millennials","title":{"rendered":"If You Are Struggling With Personal Finances, Try Managing Money Differently With These Apps"},"content":{"rendered":"

The world has always envisioned a future built around technology since the 1990s and although we were wrong about the flying cars and levitating skateboards, technology has clearly taken hold in our daily lives.<\/p>\n

Nowadays, cashless transactions, customer service chatbots and of course, mobile applications designed for almost anything are part of how we use services and communicate on a day-to-day basis.<\/p>\n

Millennials (people born between 1981 and 1998), especially, have embraced technology with open arms and research found that those within South-East Asia, particularly within Malaysia and Singapore, also prefer online channels for personal finance<\/a>.<\/p>\n

However, research also shows that millennials aren\u2019t as financial savvy with their money as they should be. According to The Asian Institute of Finance \u201cBridging the Knowledge Gap of Malaysia\u2019s Millennials<\/a>\u201d studies, 75% of Gen Ys have at least one source of long-term debt, while 37% have more than one long-term debt obligation such as a car loan, education loan and mortgages.<\/p>\n

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Furthermore, only 55% pay their debt on time, which means nearly half of Gen Ys have poor repayment abilities.<\/p>\n

Considering that millennials are dubbed to be the moguls of the future, are Malaysian millennials, which make up 36.82% of the population<\/a>, financially ready to fulfil this \u201cprophecy\u201d?<\/p>\n

<\/span>Millennials struggle with money management<\/span><\/h2>\n

Urban Malaysian millennials were reported to have a \u201cparty now, save later<\/a>\u201d attitude, while prioritising travelling, gadgets, fashion and beauty over a healthy financial savings account.<\/p>\n

The Asian Institute of Finance further predicted they have no real ability to launch a financial plan for their future and will be burden with excessive debt during their younger years.<\/p>\n

However, studies revealed that their savings appetite mature with age as the highest proportion of savers were those between the ages of 27 and 33. Nevertheless, millennials are conscious of the value of money but merely lack the knowledge and skills to manage their finances.<\/p>\n

Furthermore, their saving habits are usually more focused on short-term goals rather than the long run.
\nMillennials, who are currently aged between 22 and 37 this year, should kick-start their savings account as soon as they have gained a stable income. But, these savings shouldn\u2019t be aimed for the short-term goals such as the latest iPhone, or your dream vacation, but instead, a stable contingency fund to help you move towards the future you want to build.<\/p>\n

Big ticket financial commitments like purchasing a property and starting a family as well as providing for education and retirement need a better game plan that what millennials a prepared for in the short term.<\/p>\n

Becoming a property owner is not just about affording the monthly mortgage payments but also the downpayment, SPA and legal fees. Furthermore, you must consider the move-in costs (furniture, renovations), housing bills, maintenance fees (for apartments\/condos) and so forth.<\/p>\n

Meanwhile, other milestones in life like marriage and having children come with major financial commitments and putting down family roots come with more long term financial responsibilities that need to take into consideration costs of living, household utilities and more.<\/p>\n

Millennials as we are pointing out, are adamant on living in the now with phrases such as \u201cyou only live once\u201d. However, while that is true, soon enough you will have to face retirement.<\/p>\n

Retirement doesn\u2019t necessarily equate to travelling, spending all your Employee Provident Fund (EPF) money and doing whatever you like. The harsh reality is that you will no longer have the comfort of a stable income and you will have to rely on your savings\/investment returns to sustain the costs of living.<\/p>\n

<\/span>Enter the robo-advisor<\/span><\/h2>\n

There are many ways to manage your finances in order to grow your savings fund nowadays with technology. Some banks have even gone online with applications for fixed deposits, unit trusts and other products.<\/p>\n

However, if you are keen on investing, this means you will have to begin a strict budget to ensure you can also sustain the costs of living after you flow your funds into a savings account. You can check out the 50\/30<\/a>\/20<\/a> way of budgeting to kick start this great habit and also use personal finance apps to ensure you stay within your spending limits.<\/p>\n

Since 2017, there has been talk of robo-advisors entering the Malaysian market after the Securities Commission of Malaysia launched the Digital Investment Management Framework<\/a> in May 2017.
\nAmong the players who have entered the digital platform to provide automated, algorithm-driven financial planning services include the nation’s central bank as well as private services made available on Google Play and iTunes.<\/p>\n

Some user-friendly money management apps you can use:<\/p>\n