Most millennials are now in their 20s and 30s, beginning a career advancement and also at the time when you are making important financial decisions. These financial decisions can include home ownership, investment strategies, and family planning. You certainly want to try to avoid some of the financial dangers that have occurred in the lives of previous generations.
Financial education is rarely taught in school, so if you didn’t learn it at home as a child, your first time in the “real world” can cause you 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
Since most millennials excel in technology, I would suggest enrolling in basic economics, accounting, and budgeting courses. These types of courses can be very affordable and very well taught by the online teacher. I believe this is a very effective way to get updated on financial topics that can simplify and improve your financial life.
Increase 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 pay the minimum each month.
Make a list of your complete financial picture
I recommend that you make a list of everything that is spent each month. Once you’ve absorbed this information, ask yourself this question. How am I going to pay for all this? There are also four essential things everyone should know about their finances: income, expenses, assets, and liabilities. Having a firm understanding of these items will help you understand your finances. There are many tools online that can help you connect all your accounts: Mint, Quicken, just to name a few. I think this is your first step to improve your finances.
Investigate passive income opportunities
Most of us work for money our entire lives and never put it to work for us. You can use your job income to earn passive income from your investments. For example, the IRS says that passive income can come from two sources: a rental property or a business in which you are not actively involved. Not make mistakes; Passive income is not about getting something for nothing. It involves a lot of work and is definitely not a “get rich quick” plan.
Start a savings account
Open a stock account with your credit union even if you can’t make regular deposits. You can use this account to save extra money for your short-term and even long-term goals. This can also be used as an emergency fund. Points to expenses from 3 to 12 months, reserve for emergencies.
Pay yourself first
Once you have money in your hand from your paycheck, IRS refund, etc., always pay yourself first. Arrange automatic transfers from your checking account directly to your stock account every payday or monthly.
Do you know the impact of your credit score?
Everyone, but especially entrepreneurial millennials, should understand that their personal credit can be the defining factor in obtaining working capital in the future. Getting approved for a loan can be a big challenge when your credit score is low. Learn to read your credit report and check it often.
Reduce your debt faster
Pay off the small debts first and gradually tackle the bigger ones. This will allow you to see results and stay motivated.
Get the help of a trusted mentor
There is an overabundance of information online regarding financial education. However, it is better to choose the brain of someone you know and trust. Their knowledge is often tailored to your specific needs.
Eliminate additional costs
It’s a proven fact that millennials have expensive habits ($ 5 a day for lattes, eating out regularly, designer fashion, etc.). Keep a close eye on your expenses and cut them where you can.
Educate your children to be financial experts
At this point, you may already have young children or are planning to start a family. Teach them that saving money is essential. When they are old enough, take them to your credit union and help them open their own accounts. Hopefully this will encourage them to keep 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!