Here are some quick tips for Millennials to help stay on track and develop healthy financial fitness.
Track Your Spending
Keeping track of your spending can change how you manage your money. Knowing where your money is going specifically can help you to re-calibrate to where you actually want your dollars to be going. Often times people are surprised by how much they actually spend on food and entertainment when they actually look at their expenses for a given month. Tracking where your money goes gives you more control and awareness of what you are actually buying.
Find Fun in Saving
When people are closely looking at their budget and tracking expenses, they are WAY more likely to spend less. Finding extra ways to save money takes work and many people find it meticulous and give up on their budgets pretty quickly. If you challenge yourself by making it like a game or contest of how much you can save each month, you will be motivated to out-save yourself month after month. It may even be motivating to challenge a close friend or even your spouse to do the same.
Automate Your Savings
There are plenty of programs out there that can help you to automate your saving. The big, difficult part of saving is seeing the money in your checking account and transferring it over to a savings account. It feels almost like you are missing out on money in the here and now. When you set up your checking account to automatically transfer money from your paycheck into savings, then you never see that money as money to be used. You don’t miss something you never see.
Open a 401(k)
Starting to add money to a 401(k) plan in your twenties is one of the best ways to start preparing for retirement. The earlier you start putting money away, the more your money has time to grow.
Grow an Emergency Fund
Building an emergency fund is really important to help avoid adding debt when an unexpected emergency comes about. For example, if your car breaks down and you need to fix it. You can use your emergency fund if you don’t have the money in your checking account to cover the expenses. Using your emergency fund is to be a last resort, but it’s there to protect you from putting large expenses on a credit card.
A huge percentage of millennials have a college education and with that most of those students have a bunch of debt. Reducing your college debt as quickly as possible is a great way to help build credit and rid yourself of being financially strapped to the borrowers. This will give you the freedom to purchase a house or a car with greater ease.
Develop a Relationship with a Financial Planner
Handling money doesn’t come easy to many people and knowing about where to put your money outside of your daily expenses can be very confusing. Pairing up with a financial planner can give you guidance about how to use your money in the best way possible. Being strategic with each dollar is going to be the only way that you will be able to see your goals come to be. Working with a financial planner can give you clarity and direction for where to put your hard earned dollars. As well as they can be your cheerleader that supports you the whole way to help you reach your financial targets.
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