Did you know that by 2025 millennials will make up three-quarters of the global workforce? No wonder that with so many millennials you might be looking for ways to improve your financial situation sooner rather than later.
Adulting is hard. Do you know what’s harder? Reaching retirement age without any money.
Keep reading to learn everything you need to know about financial planning for millennials.
Financial Planning for Millennials: 7 Tips to Boost Your Money Smarts
School doesn’t usually have classes dedicated to learning about finances and understanding them. If your family hasn’t spoken to you about credit scores, interest rates, and taxes you might find yourself in a bind when you graduate school and enter the “real world.” Financial planning for millennials doesn’t have to be overwhelming or scary with the following tips.
1. Know Where Your Money Is Going
One of the first things you want to do to boost your money smarts is to make a list of what you’re spending your money on. Include everything on this list even that daily cup of Starbucks you have every day. The goal is to truly know where your money is going.
This will also give you insight into where you might be able to save money. Another reason for making a list is that it will show you how much money you need to make at a minimum in order to pay the bills. It will also show you how much spare money you have at the end of the month if there is any.
2. Passive Income
Believe it or not, there are ways to bring in passive income every month. This isn’t something that many parents taught the millennial generation. Most people work for their money their entire lives up until retirement and beyond in some cases.
It’s great to look into different passive income opportunities. We will discuss one way in tip number 5 below.
3. Online Classes
Thanks to the world wide web there are many courses available for anyone including millennials to take. Searching finance, basic economics, or accounting courses on a provider like Udemy will bring up plenty of options that are affordable and there’s something for every budget. It’s smart to stay on top of understanding finances especially since it wasn’t a subject truly taught at school.
4. Shop Smart
It’s a good idea to avoid an impulse purchase while you’re out running errands or at the store. You can avoid impulse shopping while you’re out buying groceries if you make a shopping list and make sure you stick to it. Look up sales for what you need so that you can save money and look for off-season clearance racks.
If an off-brand product is comparable to a brand name product opt for that generic store brand instead. Make sure that it makes sense as far as the price and quality of the product.
Anything that you use often you can order online in large quantities or find a store that will sell in large quantities. Do the math and make sure that the price is lower to make sure it makes sense to stock up. If it’s something that expires don’t buy more than you can use so that you don’t end up wasting it.
With your list of where your money is going, you will know if there’s any leftover money after your income and paying your bills. With that money, you can choose to invest wisely. Like we mentioned earlier about having a passive income this is a great way to watch your money grow long term and have it come in monthly.
Investing in stocks means that if the company you invest in does well you make a profit. Keep an eye on Dow Jones now to have an idea of the market and what’s going on. Stocks can be risky but also very profitable when a company grows.
It’s smart to invest in more than one stock at a time to have a higher chance of profits. This is a great way to diversify your investments.
6. Did Anyone Say, Mentor?
There are plenty of self-teaching opportunities thanks to the world wide web but sometimes looking for a mentor is smart. It’s a way to avoid making mistakes because you’re learning from someone with experience that has been in your shoes before.
Find someone you can ask questions and bounce ideas off them to hear back their thoughts and opinions.
7. Spending Guide
This guide or plan will help you take control of your financial future. It’s not meant to be a strict budget to make you feel tied up to a specific spending amount for each activity you choose to do. Instead, it’s a guide to show you how saving during certain outings will help you reach your own financial goals.
For example, going out for dinner once a week vs five times per week will help you put money in savings rather than spend it. In turn, this will mean whatever your goals are you will be able to achieve them faster.
Now It’s Time to Boost Your Bank Account
As you can see from the seven tips above financial planning for millennials doesn’t have to be overwhelming or confusing. With some planning and list making you will be able to boost your bank account in no time. On top of boosting your bank account, you will be able to check off your list of goals when you make the right moves with your finances.
If one of your goals in the near future is to buy your first home check out our guide to buying a home.