While millennials may have a lot going for them, a solid financial track record isn’t often one of them. Having likely graduated on the cusp of the 2007 recession, many millennials took longer than baby boomers to establish their careers. In addition, this generation incurred large amounts of student debt as a result of pursuing tertiary education opportunities, coupled with the most recent economic implications of the COVID-19 pandemic. It is easy to see why young people have a very ‘carpe diem’ attitude when it comes to their finances.
As this population ages, they are beginning to realize that a future without savings or a safety net doesn’t bode so well. If this sounds familiar to you, rest assured that all is not lost. Here are a few tips to help you save and establish financial stability.
Stop Procrastination and Start Saving Today
The earlier you start saving, the more money you’ll build over time. If you start saving, even just a small amount, as soon as you start full-time work, you’ll give yourself the best possible start when it comes to taking advantage of compound interest.
Track Your Spending
The next step when it comes to saving is to draw up a budget. The best place to start is by working out where most of your income goes each month. Begin to track your spending by keeping a detailed log of all outgoings including the essentials such as rent, bills, car payments as well as the lifestyle expenses such as eating out, subscriptions, fashion, and gifts. There are loads of great apps that can help you with this.
Actively Look For Ways to Save
How much money should be saved? Well, isn’t that the million-dollar question? Some may say you can’t ever save enough. Life is full of unexpected challenges and the importance of having a little extra cash to cushion those blows can’t be underestimated. Actively start looking for ways to save. Whether this means buying in-season items when you do your grocery shop or shopping at thrift stores, there are loads of ways to find a bargain.
Open a High-Interest Savings Account
Opening up a high-interest savings account means you can keep this money separate from your outgoing funds and avoid the temptation to spend on non-essentials. If the COVID-19 pandemic has taught us anything, it is that it is wise to have some financial cushioning as the world can be flipped upside down at the drop of a hat.
Pay Off Your Debts
Whether it’s student loans, credit cards or a mortgage, getting your debts paid off as soon as possible will certainly make life easier when it comes to personal financial management. Explore refinancing options as well which may offer more favorable interest rates.
There is no doubt that millennials have been dealt a bad hand when it comes to economic security, but this is no excuse to live paycheck to paycheck, so don’t bury your head in the sand. Start saving, managing your finances better, and set yourself up for a brighter future.