Personal Growth

5 Personal Finance Tips For Millennials

Millennials are finding more and more that their money doesn’t go as far as their parents’ money did. As such, they have to be both more clever, and more determined, to make their money work for them. That isn’t easy in this day and age, but there are a few tips that can give younger people a hand up on getting on top of their finances.

 

5 Personal Finance Tips For Millennials

Tip #1: Pay Yourself First

With so much money going out the door for food, rent, and Friday night drinks, it’s easy to feel like you’re never going to be able to actually build anything. One thing you should do before you pay anyone else, though, is to pay yourself. What that means is that you need to take a chunk of your check, and put it right into your savings account. And another into a retirement account, if you can afford to.

It doesn’t matter how much you save, either, as long as you get into the habit of saving. It might just be $5 a check, but that will add up over time. It’s the muscle memory of making sure you put savings away first that you’re trying to build.

Tip #2: Set An Honest Budget

We all know the basic idea behind a budget. You take your check, and divide it up so there’s a certain amount of money going to every part of your life. X amount for bills, Y for savings, Z for groceries, etc. However, too often we set unrealistic budgets, or budgets that don’t account for all our needs.

You’re living your life. No one knows better than you what you need, so you have to be honest with yourself. If you know you go out on your lunch break twice a week, or that you’ll need to get a new pair of work boots at least once a year, include that.

Tip #3: Cash Over Plastic

It’s all too easy to lose track of how much you’re spending when you’re using plastic. While it’s true we all have online banking apps these days, so we can always check our balance before we head to the check out, how often do we really do that?

An easier way to spend less, or at least to think about spending a little harder, is to carry cash instead of a credit card. Cash feels physical, and we can feel how much we’re parting with every time we make a purchase. Psychologically, cash is easier to deal with, because you know you want to hang onto it. Credit is often an out-of-sight-out-of-mind scenario, and that can be a problem.

Tip #4: Get Tax Smart

Taxes are something we rarely think about, until it’s time to fill out all our paperwork again. They’re inescapable, though, and it pays to think about them throughout the year.

For example, did you know that if you donate items to charities like Goodwill or the Salvation Army that you can claim those deductions on your taxes? The same is true of contributions to many retirement savings accounts, like an IRA. If you save your receipts all year long, you might be surprised what it does to how much you have to pay in taxes.

Tip #5: Don’t Be Afraid To Ask For Help

Though we live in an age of unprecedented information freedom, getting help on your finances can be hard. Don’t be afraid to ask for help in managing them. Most banks have investment officers, and there are often programs at your local library, government center, and other locations geared toward helping people get their money under control. Friends, family, and even co-workers are also good sources of information. If you’re looking to get on the inside track, then try to follow in the footsteps of those who’ve succeeded before you.

 

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