The Top 5 Money Tips Millennials Must Know
Millennials are at that stage in life where adulting becomes something you can’t avoid any longer. It’s time to get your life together, and that starts with your finances. The following tips are not considered financial advice, but they may offer some of the most important money tips you need to know!
Looking after your money and learning how to make your money work for you is so crucial. Unfortunately, a lot of millennials grow up without a great deal of knowledge on how to look after their finances. There is still time for you to take control of your finances and start planning.
Define your financial goals
Some people define success as living a luxurious lifestyle with a big house and fancy car. Others find it has enough financial security to avoid worrying about money. Set aspirations aligned with your values and visualize where you want to be in the future.
Make sure you leave room for immediate goals as you create your plan. When you set realistic, incremental goals, you are more likely to succeed. In addition to feeling great after accomplishing these smaller goals, you’ll be motivated to continue setting smaller goals when your next set of goals arises.
Become familiar with your credit score
Credit plays a major role in the US financial system, so being creditworthy is important. Getting a loan is determined by your credit score. Each credit bureau assigns credit scores differently.
As a result of a healthy credit score, you may be eligible for loans and credit cards. Get lower interest rates on credit cards, and have more credit card limits.
Always be saving
It’s the biggest tip of all; everyone needs to start saving money from a young age. There isn’t a set amount of money that you need to save each month. It’s all relative depending on the individual and how much you earn.
However, a lot of experts suggest that you should aim to save around 20% of your income every month. The remaining 80% is then split into essential items and other purchases you might consider making. If you follow this rule, you should be able to save a good amount of money every year.
So, the median annual wage is around $34,000 in the US, so you could theoretically save $6,800 at the very least every year. Of course, you might be able to save more, but use the 20% as a benchmark.
Alongside saving money, you should make a conscious effort to invest some of your cash. Technically, you can argue that putting money into a savings account is a form of investment. However, there are many other things you can invest your money in to see long-term gains.
With ideas like stocks and shares, it’s always crucial to actually understand what you’re investing in. Spending $100 on some shares of a company and then just leaving them isn’t the most productive use of your money. Instead, think of things like investing in your 401k or getting another pension plan on the go.
Protect your assets
Lastly, all of the assets you invest in need to be protected in one way or another. Let’s say you have lots of investments on the go – what happens if there’s an accident and you sadly pass away?
It’s a horrible thing to think about, but consider where all of this money goes. It could all go to the state if you haven’t set things in motion to dictate otherwise. Establish trust and get your certificate of trust in order, so that you know what should happen to your assets if you can no longer control them.
Similarly, on the protection side of things, think about insurance. This applies to investments like property or cars. Insurance helps you protect them if things happen to them, so you don’t lose money.
As a millennial, you need to start thinking about your money if you want to enjoy a brighter future. Money tips can be complicated and boring, but these tips will help you make the most of your finances.