I know what you’re thinking – yet another lecture on how millennials need to save more. Before you roll your eyes and move on, hear me out. Do you want to be working for the rest of your life? Until the day you die? Probably not. But even if the answer is ‘yes’, a consideration is whether you will be able to work for the rest of your life? But if the answer is a resounding ‘no’, you need to start saving. Traditional retirement schemes (those that pay a defined benefit for life) are under strain as life expectancies continue to increase far beyond what they were designed to pay for. If you have a retirement savings account – congratulations! Not everyone does, unfortunately. But how much do you need to be financially secure in old age? And are you saving enough? This is one of the areas we address in our new white paper, “How We Can Save Our Future”.


Size of the retirement savings gap, 2015-2050 (trillion $)


Budgeting is critical


The most important step is the first one – make a budget. Chances are, you know what you are making – how much your paycheck is, and how often you are paid. That is “good news” knowledge that is easily retained and a pleasure to think about. Now, how much do you spend? Weekly? Monthly? If you are hesitating to figure it out, that is because it is “bad news” knowledge – something we actively try to avoid dwelling on too much. But it is just as important to be aware of how much you spend as it is to be aware of how much you make. More importantly, you need to be spending less than what you are making. Yes, that is a simple concept, but I ask again – do you know how much you are spending, and what you are spending it on?


Savings can save you


The next step is to prioritize “savings” as one of your budget items. This is easier said than done – especially if the difference between what you make and what you spend is already very tight. I’m not going to try to tell you what you should cut – that is an individual decision, and everyone has their own perspective and priorities in terms of what is important. I’m only going to make the obvious point that the numbers themselves are very black and white – to save more, you need to spend less (or make more).


Is there anything that can help in this regard? Actually, yes. There are potential solutions from a technology angle. Mobile apps have been revolutionary in terms of providing us with convenience, but also be aware that that same convenience has also made it very easy for us to spend more money. On the bright side though, there is now a growing segment of apps that aim to address this problem by making it easier to save.


If you're part of the broad majority of people between the ages of 18-54 who are willing to trust mobile apps with their personal data in exchange for help on managing their finances, then you're in a good position to start saving.


93% of under-35s are interested in online financial tools but they must be credible and secure


Starting early is key – there is nothing like the power of compounding to grow your balance through to retirement. Even if you haven’t started yet, don’t despair – I’m talking to you, Gen X’ers – the key is to start saving, as the longer you delay, the greater the impact on your retirement balance.


Wealth at retirement can be much higher when savings start earlier in life


If you’ve stayed with me this far – thank you! If what I have shared is not new information, then you're doing OK. If some of it is, or you've found it challenging to put into action what you already know, act now. Create a budget. Start saving. Save more.

Your future self will thank us both.


Han Yik, Head of Institutional Investors, World Economic Forum