Millennials are often portrayed as a generation of entitled, lazy and spoiled individuals who expect the world to be handed to them on a silver platter. According to a recent survey, only 7% of millennials have been investing money in their retirement accounts. If you’re one of the many who are putting off preparing for your future, it’s time to take action!
Today, we will share some tips on financial life planning with millennials. We want this article to be a starting point for you to learn how to manage your money, what to consider when making investments, and how to find opportunities to save money.
Here are some financial life planning tips:
1. Start Investing as Soon as You Can
The earlier you start building your investment, the more time it will have to grow and compound over time. Compound interest is the most powerful force in the universe, so don’t ignore this fact! If you’re not already investing, start small with a Roth IRA or an index fund.
2. Find ways to increase your income
If you’re currently stuck in a job that doesn’t pay very well or doesn’t offer any opportunities for advancement, it may be time to consider switching professions or finding an additional job on the side (or both). Working two jobs at once might seem daunting at first, but it could end up being worth it in the long run if it means building up your savings account and increasing your overall net worth in time for retirement.
If you’re good with foods and have an entrepreneurial mind, you can open a smoothie bar and sell smoothies in bulk and freeze them into single serving sizes, which can be taken out and thawed as needed. You can also make a variety of flavors, so customers will come back for more!
3. Make Your Money Work for You
Investing isn’t just about making money; it’s also about growing your nest egg so it can generate income when you need it most — whether that’s in retirement or to cover an unexpected expense. A good financial advisor can help you determine how much risk is right for your situation and determine which investments may be best suited for your goals. Don’t let fear keep you from getting started!
4. Pay off your student loans
If you’re still paying back your student loans, it’s time to prioritize them. You could knock out that balance in just a few years by putting extra money toward your debt each month.
5. Create a budget
You can use the free budgeting tool from Mint, which allows you to track your spending over time and set goals for paying off debt and building savings.
If you want more specific advice, plenty of books and apps are available that will walk you through everything from creating a budget to investing in stocks.
Creating a budget and following it can be hard at first, but once you get into the routine of it, it becomes second nature.
Once you know where your money is going each month, you can start making changes — like cutting back on eating out or buying coffee daily.
6. Build an emergency fund
The most important thing you can do is keep your job and build up an emergency fund of three months’ worth of living expenses in case you lose your job or face other unexpected expenses. It’s also important to set aside money for retirement and other goals.
7. Have a Vision
What do you want? Do you want to buy a house or save for retirement? How much do you want to spend on travel? What kind of lifestyle do you want to live?
Whether you’ve already found success or just starting, having a vision for where your life is headed can help keep you motivated and focused on what matters most. Think about where you want to be in five years or 10 years — or even further down the road — and use that as motivation whenever you need it.
Hopefully, these plan life planning tips have inspired you to start working on your financial future. If you do just a few of these activities, at least monthly, you’ll develop a solid foundation for financial success that should serve you well for the rest of your life. Whether you do this for sentimental reasons or for more pragmatic ones, your future self will thank you for starting early.