SINGAPORE - Millennials are a much maligned generation. In May, Australian millionaire Tim Gurner slammed millennial spending habits during a news programme and caused outrage from Generation Y worldwide.

"When I was trying to buy my first home, I wasn't buying smashed avocado for $19 and four coffees at $4 each," the real estate mogul, 35, told Australian current affairs programme 60 Minutes.

Variously accused as high-maintenance, impractical and soft, millennials have a reputation for dreaming big but being unwilling to work for their aspirations.

Among these dreams is retirement at 60. According to HSBC's Singapore report in May on The Future of Retirement series, Shifting Sands, most of those here aged between 20 and 37 expect to quit working at 60. This is two years earlier than the overall average of those surveyed in 16 nations.

Rather than heap scorn on their dreams, Ms Shirley Tan, head of marketing and customer experience at Etiqa Insurance, said millennials should plan early in order to be nearer their goal.

"Millennials are in the best possible position to get started, with about 40 years to save for retirement, and whatever they contribute will grow and accrue interest greatly over time," she noted in a report "New grad? Never too early to think of retirement" by The Straits Times Invest editor Lorna Tan.

Recognising that graduates should embark on their financial journey as early as possible, the report offered some tips on what millennials should be thinking about when it comes to savings, insurance and investments.

1. Save at least 10 per cent of income - consistently

It is important to start cultivating the habit of saving as soon as you get your first pay cheque, whether it is saving for retirement or for big milestones to come.

ST Invest editor Lorna Tan calls this "paying yourself first". She has an automated arrangement where a portion of her income is channelled to another savings account which she does not touch.

"I increase this portion when my income goes up, such as when I have pay increments and I save almost all of my annual bonuses," she wrote.

Mr Brandon Lam, Singapore head of financial planning group, DBS Bank, advises millennials to set aside savings of at least 10 per cent of their income on a recurring basis.

They should also set aside at least three to six months of their monthly expenses as liquid cash savings for contingencies.

2. Pay off study loans

Graduates who have taken study loans should have a plan to pay off the outstanding amount by allocating a part of their income towards this, said Mr Lam.

Interest that is charged on the borrowed amount will be compounded over time, so it is financially prudent to redeem the loan as early as possible.

3. Setting a realistic budget

It is prudent when you are in a new working environment to track your expenses. Once you have a handle on things, you may not need to track every cent but should continue to have a general idea of your monthly expenses by keeping receipts and checking them against your debit/credit card bills and banking statements.

This also helps to guard against fraudulent online transactions.

Rather than viewing your income as one lump sum, proactively allocate it for the different uses in your life.

When circumstances change, such as when you receive a pay rise or a windfall, it is also useful to review your budget.

4. Watch your spending

Learn to enjoy simple pleasures and avoid splurging on wants. The best things in life are free such as a beautiful sunset, a moving piece of art, well-written books that you can borrow from the library and time spent with family and friends.

When you have to spend in a big way, ensure that it would be for investments that contribute to your financial goals, or for family meals and holidays to grow the precious memory bank.

5. Insurance

Insurance plans can address short- and long-term goals, although millennials should consider the sustainability of meeting premium payments throughout the plan's tenure. There are also penalties for opting for early redemption.

To find the most suitable plan, you should learn about and compare the different insurance products.

For example, getting a term insurance plan which provides a payout upon death is something to consider if you have dependants.

Equally important is hospitalisation insurance cover such as an Integrated Shield Plan and a critical illness plan.

Said Mr Daniel Lum, director of products and marketing at Aviva Singapore: "Critical illness could happen to anyone, and easily racks up hefty medical expenses for those affected. It is best to make sure you have a strong financial safety net to serve both your and your family's regular needs should the worst really occur."

6. Investment

Once savings and insurance needs are met, any excess funds that may not be required in the short term should ideally be invested for a higher rate of return, said Mr Lam.

This is because starting investing early would enable compounding to work to your advantage.

It would also help to mitigate the effects of inflation. As purchasing power is eroded over time due to inflation, one should always aim to invest at a rate of return above the inflation rate.

But it is also important to ensure that current needs are not compromised - it might not make sense to invest all of your savings over the next 10 years if you plan to buy a home in the near future.

There are other questions to ask yourself: How much volatility can you withstand and how much can you afford to risk or lose? What is your investment horizon and how long do you plan to stay invested? Do you prefer investing a lump sum or investing smaller sums periodically?

It is worth your while to spend time understanding the product/scheme before any investment. Do not invest in anything that you do not understand.

7. Adopt a long-term view

Keep your retirement goals in sight at all times and look out for tools to achieve passive income flows during your golden years.

In Singapore, these include blue-chip stocks, retail bonds, preference shares, investment properties, Singapore Savings Bonds, the Supplementary Retirement Scheme and annuities.

Understand the Central Provident Fund (CPF) schemes. The CPF is an essential component of financial planning, so it pays to get on top of the details in order to reap maximum benefits.

This report was adapted from New grad? Never too early to think of retirement and A letter to my daughter who just graduated by Lorna Tan