If you’re a millennial, are you doing something today that will build a strong financial future? Did you know that your financial success depends on what you’re doing today?
There’s an estimated 63% of millennials are worried about money. All those worries can be remedied by having a sound financial plan for a brighter and stress-free future. It all starts with learning the things to achieve financial security and executing those plans properly.
The 10 Proven Steps to Millennial’s Financial Success
There must be a combination of proven and tested strategies that will put ease to the high levels of financial uncertainties. Every millennial should know that there’s a tough employment market. Even if you’re a college graduate, landing in a high-paying job is still difficult. There should be a cultural shift of this young generation and the parents supporting their adult children. The emergence of building a brighter financial success comes into play. In a nutshell, a solid financial foundation must be built.
A report from Bank of America said that more than 50% of the millennials at present are living in a rat race life. Meaning, they live paycheck to paycheck. Their financial life is miserable. They are not able to save for the future. More than 1/3 of the millennials are still having some financial assistance from their parents or other family members. When financial dependence persists, it can ruin the retirement plans of the parents or any older adults.
Being a millennial is a challenge. You are responsible of doing something for your future self. If you’re struggling financially today, that’s alright. But make sure that you have workable plans and you’re executing those plans that will lead you to financial freedom.
Below are some of the proven and tested steps to attain financial success. Let’s take a look at them one by one.
It’s not how much you make, but how much you keep that matters!
All of us want to have a high-paying job that will give us more money each month. But the higher the salary you have equates to more ‘wants.’
Because you have a lot of energy while you’re still young, you can use it to build a financial foundation today by prioritizing your cash flow. Every little income that comes your way should be considered. This is your ladder to succeed financially. Try to reduce spending so you won’t be wasting any money. Just consider basic mathematics: what goes in must not goes out at all.
Plan ahead of time and test your plan if it really works
Why having a plan is important? It’s important because, through this way, you can avoid the trap of rat race. Your plan must incorporate all the necessary things related to money making. Your plan must also include how to utilize your time to have a strong financial gain. It’s just okay that you have 9-5 job now, but always think of having extra activities that will generate funds for you.
Building network is important. You need people to stay behind you. You need them to make your foundation stronger. Don’t stay with a career that does not allow you to grow and achieve success.
Avoid any unnecessary expenses
Most millennials are spending a lot for entertainment, travel, and leisure. But if you’ll learn how to cut your expenses monthly, you’re really giving value to your hard-earned money. This will have a positive impact to your personal finances, too.
It’s just important to learn how to sacrifice on things that are unnecessary. Defining needs and wants should be learned, which will eventually help you avoid financial pains in the future.
There are so many ways to trim down unnecessary expenses. If you’re planning to rent, don’t rent an entire house or a condominium unit. You can ask your friends to share with you to split the monthly rental fee. Another thing you can do is take a public transportation service to save more money, instead of buying a car and then spending for fuel every single day. You need to think twice whether or not a particular expense will give you more headache.
Invest in education
Education is important to securing your future. And investing in education is the best investment you can have for yourself.
You have to be realistic. Competition is really stiff these days, which means holding any bachelor’s degree will not take you that far. Having limited income is not a good excuse why you can’t invest in education.
You have to look for student loans or scholarship grants if available. If you’re planning to apply for a student loan, just make sure you won’t be paying very high interest rates.
There’s also a way to have income-based repayment plans. Through this way, you’re offered a grace period when you can start repaying the loans and the corresponding interests. There are recommended sites for you to use when looking for student loan offers. One of the sites is Tuition.io. This site allows the loaners to track their loan payables anytime.
A future investment is important
It’s always wise to invest for your future. If you’re being offered a retirement plan by your company, you should grab it. You need to invest in it. Why? It can help secure your retirement years, so you won’t cause financial and emotional stress to your children and loved ones.
It’s just absurd that most millennials are not doing this. They ignore the importance of saving for their retirement because all they want is to just enjoy the present time. Just think of having a great future wherein you can enjoy your time and money together with your family. By investing, you can enjoy the power of compounding.
You can also try a 401(k) savings calculator from many sites, like BankRate.com. This is for you to get and understand the thought why and how your contributions will accumulate through the years. By just inputting a few numbers like salary and contribution share, you will be able to determine how much money you’re going to enjoy after several years. Further, just make sure that the investment you choose is really working when you sign up for a 401(k). While you’re still young, you should focus on growth-inclined investments.
Avoid debt as much as possible
A lot of millennials are using credit card these days. The interests incurred in your credit cards are usually high. You must pay off your credit card debt first so it won’t complicate your situation — your financial future.
You should also avoid borrowing money from friends or loved ones if you’ll just spend the money for gadgets or anything that depreciates its value.
Grab those perks
Missing out your company’s incentives is a huge mistake. Yes, it is! That’s why you need to determine your company’s incentives programs. Your health savings must also be given an utmost significance. All these programs reflect “free money” for you.
Some companies offer a 401(k) matching program. In this program, they will match their employee’s’ contribution and a certain percentage to the 401(k) plan. The matching can vary only based on the rules and restrictions. Many companies also offer bonuses such as free tuition for workers who want to continue studying. Or, they offer academic assistance for the employees’ children. The main point here is that you should grab those perks and incentives you can have from your company.
“Stake of life” stock plays a major role
Aside from contributing to a 401(K) plan, it is suggested that you invest in the stock market. There are many companies at present offering shares and stocks at a lower price. By investing in one or more stocks, your money will have a bigger value 10 to 20 years from now. Your money is earning gradually.
Many stock investors advise that wealth creation should not focus on diversification, but on ‘concentration.’ The stock market is volatile. Yes, it is but you can buy more stocks if the market is down or bad, and wait until the market recovers.
Find a financial adviser or mentor
A large percentage of millennials don’t have in-depth knowledge of personal finance, investing, and wealth creation.
You should look for someone to teach you about money and how to build a strong financial foundation. The more you crave for financial knowledge, the more are close to financial success.
You can also look for an oldest person in your office. This person should be financially stable. When you find this person, you should ask him or her about the lessons and struggles for him or her to attain such financial independence.
Build networks both online and offline
The presence of social media networks these days has many advantages for you. You can easily do online networking through circle of friends and acquaintances.
You can also build your network offline or person-to-person. By doing this, you’re making a strong foundation for the future.
Both online and offline connections can have positive impact to your career and financial health. You can use Facebook, LinkedIn, and/or Twitter, or you can do it person-to-person to join professional communities and organizations. You may find other people
All millennials must prepare for money and financial security. Your future is just a few years away from you. Don’t waste time!
Have a productive life today by making plans and executing them right. It came out in one survey that millennials are having an average of $150,000 in mortgage, student loan and credit card debt. These things can trap you and can drown your financial future.
Some financial experts have this prediction that the millennials will become a big factor in the next real estate industry boom. So what should you do next? Consider investing in real estate assets like a house. There are also other assets you can invest in. What is important is that you know that investing in assets will provide residual money for you and your family in the long run.
There are also non-traditional opportunities you can take. You only have to understand deeply that the rat-race life must be avoided. Avoid spending on the unnecessary things such as cars, fancy clothes, and the like. Instead, save your money and look for ways where the money will eventually work for you.
Are you planning for your financial future today? Time is gold so don’t waste it. It can be hard at first but when you come across the bridge, you’ll know that it’s so easy after all. Be determined, committed, and futuristic. Your financial success in the future depends on what you’re doing today.