No matter how you define who is a millennial – from a child of Baby Boomers to Generation Y – one thing is certain: they’ll face their share of economic and employment challenges like every generation before them.
The good news, however, is that they have plenty of information and strategies to help them clear every financial obstacle in their way. If you’re a millennial, here are some tips to help you navigate your financial future.
1. Start Early
This bit of advice has held true for every generation, i.e., the sooner you start saving the better. No matter what your salary is now, begin saving while you’re young so that you’ll be able to handle the credit bills and loans in your future. It’s tempting when you get your first “real” paycheck to spend it on things you’ve always dreamed of having, but take a deep breath and let your savings build before you overspend on housing or a car.
You should also make it a point to increase your savings each year, even by just a small amount, whether that means contributing more to retirement accounts, increasing your emergency fund, and more.
2. Trim Your Debt
You may have student loans and/or credit card debt if you’re a recent college graduate. A great strategy is to develop a plan to pay off your debt in a reasonable amount of time, focusing on your highest interest debt first.
3. Begin Saving for Retirement
You should always participate if your company offers a 401(k) or other retirement savings plan. Many millennials simply contribute the minimum of 3%, but aim to give more (up to 15%) to maximize your savings potential. Matching your employer’s contributions is another excellent way to make sure that you’re saving enough.
4. Create a Budget
Creating a budget is one of the most important steps you can take towards building a secure financial future. Your financial life becomes even more complex as you get older and buy a home or start a family, while your goals will continue to evolve. Focus now on both short-term and long-term goals while thinking about priorities for the future. Building a financial plan and sticking to it will help turn your dreams into reality.
5. Keep the Conversation Open
Conversations with your spouse or partner about money and savings are another way to keep you on a solid financial track. Understand each other’s goals and be prepared to compromise on various financial matters. The important thing is to have these conversations before tensions occur.
Give us a call today, or stop in and see us at one of our locations, and one of our professionals at Peoples Bank will help you plan for your financial future.