Millenials are the up-and-coming generation of young people who have the incredible power of changing the economy. While studying away at college, millennials managed to pick up the highest student debt rates the nation has ever seen, then entering job and housing markets with little room left for options other than living from paycheck-to-paycheck. Luckily, if you’re a millennial faced with this position, time is on your side and the internet has become an overflowing fountain of information that can be accessed with a few clicks on your phone. Brush up on your financial literacy and strategize smart ways to plan and save your money to build a wealthier future for yourself using these tips.
Calculate your expenses
We can all agree that it is far easier to spend our money than to save our money. And that’s not just on frivolous purchases… rent, insurances, groceries, gas, utilities, student loans, and all sorts of bills pile up quickly and force you to allocate funds to make sure they’re paid off on time and in full. Instead of just hanging on for the ride, make a comprehensive list of all your expected ongoing expenses. Doing this will allow you to calculate your total cost of living per month, and you can break it down even further by week. After subtracting your monthly outgoing expenses from your monthly income, you will have a total dollar amount of extra income that you can use as you see fit. But however you decide to use your extra income, make sure to put a percentage away into savings.
Find the best bank account
Not all bank accounts are created equal. When choosing a bank to entrust your savings, you should always do your due diligence during the research process. Everyone has different needs from their bank, but you should be on the lookout for the following:
- FDIC insurance
- Low minimum requirements
- ATM access
- Online banking
- High yield options
- Reasonable regular fees
Read up on personal finance
While it’s true that the internet is great for quickly accessing information, there is no better education than a good, old-fashioned book. Having a better understanding of how to manage your finances will set you up for a successful future and answer questions you may have about personal finance. We recommend these three books
- Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin
- The Money Book for the Young, Fabulous & Broke by Suze Orman
- Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry
Understand tax season
Each year, the IRS has an open window from January to April for American citizens to file their taxes. Doing your own taxes is admittedly confusing for first time filers, but there are many resources out there to assist you through the paperwork. You could also outsource the heavy-lifting to a tax preparer who uses tax software for professionals in order to find you the biggest possible return. Your parents or more-seasoned friends could also serve as great resources for learning the tax ropes.
Passive income is the best kept-secret wealthy people will never spill. In fact, many investors don’t even know the basics on how to get started with investing their money, they just rely on smart apps like Acorns to do it for them! If you are able to put some cash away into savings—even just by rounding up your change to the nearest dollar amount—you should begin investing.
Change your habits
With a hard-learned lesson of understanding just how quickly bills can pile up, millennials learn sooner than later how changing their spending habits could affect their livelihood—both now and in the future. If you find yourself constantly strapped for cash at the end of the week or month, it may be time to reconsider where that cash is going. If you live close to your workplace, consider biking to save on gas. If you are constantly eating out, consider spending more nights in and cooking quick and easy meals. Apps like Tasty offer easy step-by-step recipes for tasty meals that cost much less than a restaurant meal.
Explore your worth
If you’re in the market for a new job, make sure any potential employers understand your worth. According to a Robert Half survey, only 39% of American workers attempt to negotiate proposed salaries. Instead of settling for an employer’s first offer, ask for a higher wage and justify your reason. You could earn thousands of dollars more than the initial offer just by asking.
Figuring out your finance is tricky and guessing your way through life can lead to lost benefits down the road. These tips will help shape your future for success and keep your wallet padded and comfortable.