Coming from someone who is in her 20’s and constantly trying to figure out what the right money moves are, I have decided that I’m going to reach out to my fellow millennials for this week’s blog. So, here are seven things that millennials (including myself) should be doing right now in order to make a better life for themselves later.
1. Saving. I know that I talk a lot about saving. It’s not because I am a natural-born saver (trust me), it’s because saving truly is the most important thing that you can do with your money. Saving is the simplest, easiest way for you to prepare for future-you and all of life’s obstacles that you know will come along. Have an emergency fund with at least $1,000 in it at all times. That way, if something does come up, you have it covered and don’t have to worry about borrowing money. You can have multiple savings accounts, so setting different accounts up to reach large goals can be really helpful to keeping yourself on the saving track!
2. Budgeting. Honestly, the best way to make sure you’re saving money is to create a budget that includes putting money into your savings account. Sure, budgeting isn’t “fun” or something that most people get excited about, but it is necessary for financial success. A budget allows you to make a plan for what you’re going to buy and how you want to spend your money. Seriously, a budget isn’t there to restrict you, it’s there to make sure you get to buy the things that are important to you, even if that means giving up a few mocha lattes and 2 a.m. honey-butter chicken biscuits. Make your budget however you want. You can use spreadsheets, apps, or online tools to help get your spending back on track and start saving for those ever-so-important goals.
3. Paying off debt. Whether it’s student loan debt or credit card debt, kicking debt in the rear end to get rid of it will save you tons of money in the long run. Sure, you probably don’t make the kind of income that will pay off all of your student loan debts in a few months while still allowing you to eat and have a place to shower, but make a plan of how and when you will pay debt off. It may take a few months or it make take a few years, but it will be worth it in the end.
4.Saving for retirement. DO. THIS. NOW. If your employer has a 401K and you’re not contributing, march yourself down to the HR office tomorrow morning and sign up! The earlier you start saving for retirement, the more interest you will be able to earn. The chart below shows two people, one who started saving at 25 and the other who waited until 40. Both are earning 7% interest, but 15 years sure does make a big difference.
5. Checking their credit score. I’ll go out on a limb and say that 20somethings are getting better at doing this than they used to be. Now that there are numerous websites and commercials for credit score checking websites, it has become easier than ever before to keep in touch with your credit. Checking your score helps you know where you stand, what debts you have, and can help you catch fraud early.
6. Using credit cards wisely. Credit cards can be good or really, really bad, depending on your spending habits and self-control. If you use a credit card wisely, it will help you build your credit, which could save you thousands of dollars on your next large purchase (like a house or a car). If you use credit cards to buy a whole bunch of stuff that you can’t afford, it will probably hurt your credit way more than it helps it.
7. Stop comparing yourself to everyone else. Everyone spends money differently. Don’t look at what other people have and think that you don’t have as much or that they’re “better off” than you are. You really don’t know someone else’s financial situation. You only have control over yourself and what you do with your money, so even if it doesn’t look like you’re “keeping up the Joneses”, don’t fret.
Sure, we’re young. Mistakes will be made. But if Now-You starts looking out for Future-You, you will be in a much better financial position later on. We may be the generation that coined the term YOLO, but with a little prep work and some good financial decisions, we can also be the generation that retires rich.
#YORO (You Only Retire Once)
Until next time…