You always hear “kids these days”, but what about them? These “kids” are what some call the millennial generation. Studies show that millennials often feel they will not be able to reach common goals such as finding a dream job, owning a home or retiring until much later in their lives compared to their parents. If you’re a millennial, here are some smart tips for getting your finances in order.
Set and Write Down Your Financial Goals
You have a better chance of accomplishing things you plan for. Set long-term, intermediate and short-term financial goals. Visit these money goals regularly and write out time sensitive deadlines to keep you on track. By establishing meaningful goals and prioritizing them based on what matters most to you, will help when determining your budget.
You Need A Budget
In order to better reach your financially goals, you need to understand the overall picture of your finances. When you have a budget, you are able to account for every dollar you spend. Money that you do not account for is money that will get away from you. For example, if you don’t realize you spend $60 on lattes a month, it’s harder to break that habit and put that money toward one of your financial goals. Even if you are comfortable financially, a budget can help you identify unnecessary expenditures and recognize ways to redirect funds toward your priorities.
Make Saving A Priority
As a millennial myself, I know how hard it is to balance between living in the movement and planning for the future. But it is important to remember that we cannot live for today at the expense of tomorrow. According to Daily Finance, you should allot 10 percent of every paycheck to savings. If this number is not realistic to you, set a number that is. The point is to start saving.
Set Up An Emergency Fund
Having money set aside for emergencies is key to avoiding financial disaster. Ideally you should be working towards having enough money set aside to cover three to six months of living expenses. Your emergency fund is intended as a safety net, and you will not reach this level overnight–Simply set aside as much as you can each paycheck until you hit your goal.
Pay Down Your Debt
While it is important to build up your emergency fund and your savings, there are a few times when other things take priority. If you have high-interest credit card debt, you need to shift your priorities a bit. Remember there are three things to consider when repaying debt: (1) start with your highest interest rates; (2) Pay off your principal first; (3) repay student loans last.
You can start on many of these financial tips with only a few hours of effort. So take the time now to establish some financial goals and create your budget just in time for the New Year. By starting 2015 and your financial life on the right foot, you will be saving yourself years of stress and headache.