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Most millennials are now in their 20s and 30s, starting a career ascent and also the time when you are making major financial decisions. These financial decisions may include home ownership, investment strategies, and family planning. Sure, you want to avoid some of the financial pitfalls that previous generations went through.
Financial literacy is rarely taught in school, so if you didn’t learn it at home growing up, your first foray into the “real world” could land you in some financial trouble. Read below to learn about some of the top financial tips that will help Millennials make smart financial decisions.
Take Online Money Management Courses
Because most millennials excel in technology, I would suggest signing up for courses in basic economics, accounting, and budgeting. These types of courses can be very affordable and very well delivered by online professors. I think it is a very efficient way to update yourself on financial topics which can make your financial life simpler and better.
build your retirement savings
Did you know that Wells Fargo revealed that nearly 50% of millennials weren’t planning for retirement? Make sure you participate in your employer’s 401(k) plan, even if you can only make the minimum contribution each month.
List your complete financial picture
I suggest you make a list of everything you spend on each month. After you digest this information, ask yourself this question. How do I pay for all this? There are four essential things everyone should know about their finances: income, expenses, assets and liabilities. Having a firm grasp of these items will help you understand your finances. There are many online tools that can help you connect all your accounts – Mint, Quicken to name a few. I believe this is your first step towards improving your finances.
Research Passive Income Opportunities
Most of us work for money all our lives and never actually make it work for us. It is possible to use your job income for passive income from your investments. For example, the IRS states that passive income can come from two sources: rental property or a business in which you do not actively participate. make no mistake; Passive income does not mean getting something for nothing. There is a lot of work involved and it is definitely not a “get rich quick” scheme.
start a savings account
Open a share account at your credit union even if you can’t make regular deposits. You can use this account to set aside extra money for your short term and even long term goals. It can also be used as your emergency fund. Shoot for 3-12 months of expenses, set aside for emergencies.
pay yourself first
Once you have the money in hand from your paycheck, IRS refund, etc., always pay yourself first. Set up automatic transfers from your checking account directly to your stock account every payday or on a monthly basis.
Do you know the impact of your credit score?
Everyone, but especially enterprising millennials need to understand that their personal loan can be the defining factor in getting working capital in the future. Getting approved for a loan can be very challenging when you have a low credit score. Learn how to read your credit report and check it often.
reduce your debt fast
Pay off small loans first and gradually pay off bigger loans. This will allow you to see results and stay motivated.
Get help from a trusted mentor
There is a plethora of information online regarding financial literacy. However, it is better to choose the brain of someone you know and trust. Their insights are often tailored to your specific needs.
eliminate extra charges
It’s a proven fact that Millennials have expensive habits ($5 lattes every day, eating out regularly, designer fashion, etc.). Keep a close eye on your expenses and reduce them wherever possible.
make your kids financially wise
You may already have young children at this point or are planning to start a family. Teach them that saving money is important. When they’re old enough, take them to your credit union and help them open their account. Hopefully this will encourage them to continue saving their own money.
I hope you use these financial tips to keep your finances on track while you are young. Remember, you have a very bright financial future ahead of you if you start now and stick with it!
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