Money Tips for Millennials

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Millennials and Money

Millennials follow a different path than generations before them, in more ways than one. This group is reaching milestones later in life, such as getting married and starting families, and focusing on life experiences more. We’ve been given all the job advice in the world growing up; the thought that all you need to do is work hard to make it big. However, someone along the way forgot to give more tips on money, especially given the difficulty of finding a job, especially in their field of study, for many millennials.

Although unemployment rates have been decreasing in recent years, millennials still make up roughly 40% of the unemployed in the United States, according to this Newsweek article. This fact can make it difficult for this generation to get ahead, but the good news is there are ways to leverage your finances even if you feel you are working a dead-end job.

Here are four money tips for millennials that I’ve used to help my own finances:

Make saving a social thing. 

I don’t know about you, but I can think of at least five friends off the top of my head who have yet to get that raise at work. While we all love hanging out together, sometimes that involves extra spending that we really should not be doing. But, a way to spend just as much time together without emptying your bank account is to take turns hosting a girls’ night in. Buying some cheap wine and snacks accompanied by some movies and laughter is a great alternative for a night on the town, which can be $81 per night on average.

Also, the crew can ban together to do money-free weekends together. Even if you are not physically hanging out, you can still help to keep one another accountable. Plus, it’s great to have an excuse to bond with friends, especially over common goals.

Create other streams of income. 

If you recognize that you are in a dead-end job, hopefully you are taking steps to get out in order to improve your financial situation. If you are having a difficult time finding a new job (another post for another day), another option would be to create some other sources of revenue as you continue the search.

Seasonal jobs are a great option for millennials as they are often a bit more flexible, but you can also offer to use some skills or talents you currently have to gain some extra income. House cleaning, babysitting and the like are all great ways to make cash fast, but you can also consider freelancing, especially if you want to land that dream job.

Get techy with it. 

Investing seems so unattainable and intimidating before you actually start doing it, not to mention it can also be risky. But, it is a great way to grow your wealth. There are so many online tools you can use now to improve your financial portfolio without the intimidation. These resources cost very little to get started and are great for millennials. The best part is many of them allow you to create your own minimum investment amount, giving you more control over than ever.

Be smart with your options. 

In desperate times, you may be tempted to apply for a payday loan or sign up for another credit card to pay off other expenses; however, by doing so, you are only creating more debt for yourself. These quick options may be easy to get, but they dig your hold even deeper. Don’t get caught up in these fast solutions to solve all your problems; instead develop a strategic and specific plan that will get you out of debt and get you ahead. This plan may include automating a monthly savings amount, consolidating current debt, starting a retirement fund, and cutting back on leisurely spending.

This is another reason why having an emergency savings fund is so important; it will keep you away from wanting to (or needing to) resort to these choices. Avoid accumulating credit card debt and instead work on building your assets and net worth.


 

Millennials definitely have had to face many challenges economically that may not have been expected or predicted by previous generations. By spending some time being careful about your finances, though, you can slowly but surely build a reliable and steady financial future for yourself.

These are just a few ways I’ve focused on improving my finances. What have you done that works for you?

 

 

 

 

A Personal Finance Checklist To Kick Off Your 30’s

A personal finance checklist can help you achieve financial goals.

A personal finance checklist can help you achieve future goals.

A personal finance checklist can be useful to ensure you are on well on your way to achieving financial success (or even simply evaluating where you stand).

Your 20’s are a great time to figure your life (and yourself) out. By the time you are 30, though, you should ideally have much of your life in order. Today’s millennials do tend to take longer to get married and start their lives, as recent reports show, but in order to set yourself up for your later years, you should analyze and improve your finances now.

I just celebrated my 29th birthday at the end of April, which encouraged me to reflect on my life experiences thus far and consider the future. The last decade was focused on enhancing and nurturing my career and my personal life along with developing myself as a full-blown adult. Basically, I spent the last 10 years getting my life in order.

As I prepare for a new decade, it’s time to take the next steps for my future. One of the first steps includes using my own personal financial checklist to accomplish over the next year in order to achieve more of my financial goals. With each milestone, my monetary ambitions change, and yours should too. I’ve already accomplished some of these topics and others still need improvement. As you begin to map out your own, this personal finance checklist will hopefully help you in more ways than one as well:

Budgeting 

  • If you have not already created a budget for yourself, you should do this first and foremost. Tracking your income and expenses is definitely not fun, but it does help to keep you in check and help you build wealth.

Reduce your debt 

  • By the time I was 27, I had paid off my car and two credit cards. My credit score not only went up significantly following these achievements, but I was able to use the money I was using toward this debt to increase my savings account. While I still have my student loan debt I am working on, my credit cards were my top priority to pay off as their interest rates tend to be higher than student loans. I’ve been able to pay more than the minimum amount each month over the last few years with less debt hanging over my shoulders though.

Save for retirement 

  • If you have not been lucky enough to have a 401(k) or similar retirement plan with your job, it’s time to open your own Roth IRA or another retirement savings account option. If you do have a 401(k) with your employer, start contributing more toward this fund. Ask your employer about a match program they may offer and do what you need to do in order to take advantage of this benefit. If you can swing it, you could invest in a separate plan as well as following one with work.
    • How much should you put toward retirement? A common recommendation is a minimum of 10% of your income. If that does not seem feasible at this time, especially with other savings plans you may be contributing to, such as an emergency fund, shoot for 2-5% and work your way up to the 10% goal.

Diversify your financial portfolio

  • As you reach your 30’s, this becomes important to include on your finance checklist. Mix up your investments through stocks, bonds and the like. Before going into such a venture blindly, be sure to do your research and even consult with a financial adviser or stock broker.

Plan for the future

  • No one ever wants to really think about dying or life emergencies, but the fact of the matter is, anything can happen to any of us at any time. As you begin to build financial stability, consider starting a family and reach more life milestones, you will want to contemplate the following:
    • Life insurance. Having a life insurance plan for you (and your spouse, regardless of whether or not he or she works) will be imperative in making any hurdles life throws your or your family’s way a little easier to deal with.
    • Naming beneficiaries on your accounts. Appointing your assets to various people in the event of your passing may not seem necessary at this point in your life, but you need to be prepared for anything. If you are not married and do not have a family of your own, you will want to consider leaving your financial accounts and any assets to your parents or siblings. Your beneficiaries will most likely change and need updated multiple times throughout your life, but get it started now so that it is not a worry later.
    • Estate planning. You do not need to be wealthy in order to start your estate planning. Get a power of attorney and a health care proxy to act on your behalf should you become debilitated and/or lose the ability to make your own decisions. Doing this will ensure you still have a full say in what happens particularly to you and your family.
    • Disability insurance. Regardless of age, you should be prepared for any event in life. If something happens that causes you to no longer be capable of working, disability insurance will provide you with a source of income.

Have a financial plan with your significant other

  • Married or not, live-in couples and relationships that openly discuss finances tend to have a higher success rate in surviving the partnership. Talk to your significant other about a financial plan and goals and compromise when needed.
    • Not married or living with a significant other? Create your own financial plan and be as specific with it as possible.

While a personal finance checklist may seem a bit daunting, it does not have to be all work and no play. It is still important to remember to splurge on yourself from time to time. As you become more financially responsible (and stable), you will find this much easier to do without placing much stress on your bank account.

Start a new decade off right with this personal finance checklist as a beginning point. If you are already in your 30’s and have yet to incorporate any of the above items, take some time to begin including these in your life goals and plan.

What would you add to the list?