9 Financial Habits All Millennials Should Adopt Right Now
As young adults, we know how hard it is to get your finances in order. You’re still finding your feet in a career, and it’s often a struggle just to pay the rent. Plus, you want to enjoy yourself! Life is for living, and when better than those young years? At the same time, however, you can start to think about the future. Your choices now will begin to shape your future earnings and money habits. Let’s face it, we’d all like to retire with a million in the bank, right?
Your mid or late twenties is the perfect time to start putting the building blocks in place for the future. In fact, it is possible to build wealth in your twenties with the right techniques. Most importantly, it will put all the right habits in place. When the bigger money starts coming in, you’ll be in a better place to deal with it. Today, we’re going to show you some of the most effective tricks, used by all of the richest people in the country. Let’s jump straight in.
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Live within your means
It’s such a simple piece of advice, but it’s a phrase you should live by. Our entire economy is based on debt, so it’s not always easy to avoid credit cards and overdrafts. They’re oh-so-tempting when you really want to buy something new! The trick is to find a balance somewhere in the middle. Live within your means, and don’t spend more than you earn. Spending more than your monthly salary is the fastest way to spiral into debt. It’s so easy to do, and it takes strong will-power to stop yourself. It will help to draw out a monthly budget, so you have a clear understanding of how much you have to spend.
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Pretend you earn less than you do
A lot of millennials ask us how they’re supposed to find money to save. Their paycheck barely covers the rent, and that’s before you’ve bought groceries, and had a life! One trick that the rich use is to pretend they earn less than they do. Cut your salary down by 20%, and make a full budget based on that figure. The rest, you should automatically move to a savings account. You’ll slowly adjust to a lower amount of disposable income, but you’re building significant wealth along the way.
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Save first, spend second
Most young adults tend to handle money the other way around. In other words, they spend their monthly salary first. If there’s anything left over, they’ll save it. This is the wrong way around. Calculate how much you want to save, and set that aside first. Before you spend it. Only spend what’s left after you’ve put some away in the savings account. If you need a hand doing this, ask your bank to set up an automatic transfer on the day your salary comes in. You won’t even notice that it’s gone.
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Set goals
If you want a rich and lucrative future, you’ve got to set goals to make that happen. Getting rich rarely ‘just happens’. Millionaires get to where they are because they make plans, set goals, and work towards them. It’s not too early to start thinking about that now. Do you want to start saving for a house deposit? Make that your two-year financial plan, and make a monthly savings budget. Do you want to build a certain amount of capital to start investing? You can even think as far ahead as retirement if you wish.
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Borrow sensibly
So far, our advice has been quite strict, and based around savings. Having said that, we’re a firm believer in spending money to make money. To secure your financial future, you’ll need to think about starting a business or investing. You need something that actively generates money. That will need an injection of cash to get started, or perhaps you want to get on the housing ladder. That will also require a loan. The trick is to borrow sensibly, and choose the right loan for you. If you’re in the military, for example, look at Omni military loans which are tailored to army personnel. Always check the interest rates on any loan, and make sure you can afford to pay it back.
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Start investing
Investing might seem a strange and scary place for young adults, but this is where you’ll make a lot of money. Starting to understand how investing works is a key skill for twenty-somethings. Now, you don’t need to dive into the Wall Street broker lifestyle! You just need to choose three or four strong, long-term stocks. They’ll pay out small but regular dividends over the years, adding gradually to your wealth.
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Invest in yourself too
Stocks and shares aren’t the only good investment you can make in those early years. You should also take this opportunity to start investing in yourself. Pay for additional training and learning opportunities that will help you get to where you want to be. If you’ve got a great business idea, invest in yourself, and see where it leads. Your early years are the best time to explore a business opportunity. And, if you can’t invest in yourself, can you really expect others too?
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Set aside 15 minutes a week for your finances
The biggest mistake millennials make with money is ignoring it. Set aside fifteen minutes every week to assess where you’re at financially. How are you measuring up against your financial goals? Where are you at in your budget? What payments are coming out soon? Can you shift some money around? These simple things are a good habit to get into, and it will help you stay on top of things.
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Pay everything on time
We’re all guilty of missing a credit card payment or paying a bill late, but, it’s time to start rubbing out those mistakes. Regular late payments will have an effect on your credit score, and it leads to bad habits in the future. As painful as it might be, pay everything on time!
Get into these good habits early on in life, and you’ll set yourself up for a rich and lucrative future!
