5 Crucial Money Tips for Millennials
Millennials get a bad rap for just about everything. From making mayo nearly extinct to turning their nose up at marriage, it’s time we realize that they think about things differently but that’s not necessarily a bad thing. They’re often even criticized for their money management but, as it turns out, is not all that well deserved of a reputation. They aren’t bad at saving but, as they are facing hard financial times and are at that point when saving for retirement is a must, there is always room for improvement. Read on for five money tips for millennials that will be crucial to their financial future.
- Realize the Impact of Your Credit Score
You can’t go five minutes watching TV without seeing an ad for checking your credit score … so much so that it is probably having the opposite effect that these ads are meaning to. Many people coast through life and have no idea what their credit score is. This is a big mistake, as it can impact everything from buying homes to getting a job. And what many millennials likely don’t realize is that you aren’t necessarily doomed if you do have a bad credit score. There are plenty of things they can do to improve it, like using credit cards strategically, cleaning up any mistakes on the report, and paying down or off any debt that they can.
- Don’t Be Afraid to Invest
In a recent Harris poll posted to Medium, it was determined that a whopping 79 percent of millennials don’t invest. As the article notes, “If that holds true on a larger scale, it means 60 million people are sitting on the financial sidelines.” And while we can understand their fears after seeing what seems like recession after recession, it’s not wise to put your money under your mattress so to speak. This is the time millennials need to learn how to invest, even if that means starting small, as their confidence in doing so (and the ultimate rewards) will increase over time. Once they start seeing the growth in fields like FinTech, millennials will become investment fanatics.
- Account for Emergencies
We live in a time when we throw caution to the wind financially. Time and time again, we hear of people who have lost their homes and other possessions because they weren’t ready for sudden illness or job loss. What millennials can learn from this to to have deductions automatically taken out of their paychecks and put into an emergency funds so setbacks won’t financially devastate them. You can always use a site like Dollar Daddy for advice on saving in this regard.
- Sweat the Small Stuff
Another thing millennials are known for is their daily Starbucks run. Hey, it’s convenient and delicious. We get it. But if you start doing the math on what this habit is costing you on an annual basis, you’ll understand why we say to, indeed, start sweating the small stuff. As this Huffington Post article notes, “Studies have shown that, depending on where you live, if you took the cost savings from brewing your coffee at home and put them in a mutual fund with a 6.5% compound interest rate, you’d accrue $7,614.80 over a decade.” Whoa, right? Analyze your bills. How many TV subscription services do you have? Are you using them at all? Is there a way to bundle your services and save money? Are you paying attention to the interest rates on your credit cards? These are all questions millennials need to be asking themselves in order to save for the future.
- Take Courses on Finance
Millennials are known for being a very tech savvy generation so they should enlist these skills online. They can take courses in finance, accounting, and asset management through sites like Coursera and Udemy. Online courses are super convenient as they can often be done when students have the time.
If you’re a millennial and you start practicing these tips sooner rather than later, you’ll be thrilled to see your portfolio grow.