Millennials are often seen as the “ill-timed generation” as it seems like the previous age group, AKA baby boomers, lived life to the fullest when they were young compared to Generation Y. According to FXCM, millennials accumulate a substantial debt upon finishing education. Last year, for example, 71% of graduates in the U.S. left their universities with an average student loan of over $35,000. The numbers are significantly higher than the 64% of students who graduated with debt 10 years ago.
There are many factors at play as to why the economy turned for the worse 50 – 60 years after World War II, and millennials who want to succeed need to work hard and change their habits if they want a relaxed and financially comfortable retirement.
Here are some tips for all the millennials out there that want to be financially stable in the future.
Make it your mission to pay off your credit cards
All financial advisers agree that if you’re deep in credit card debt, you will not be able to get out of it anytime soon. So pick a credit card with the least debt, and plan to pay it off immediately. Once the debt on that credit card has been settled, move on to the next one.
Talk to your credit card company and ask if they can help you pay your credit with less interest. Sometimes, all it takes is one phone call for you to have a lighter load on your debt. Credit card companies are very accommodating to their customers due to the number of competing issuers. They want to retain you as a customer, thus they’ll always try their best to help you in more ways than one.
Get into a plan right now if you’re still not saving for retirement
What millennials have to understand is that they’re not invincible. Before they know it, retirement will come knocking.
The earlier you start saving, the better you will be prepared when the time comes when you’re unable to work anymore. A lot of people shy away from setting up a plan for retirement because they think it’s expensive but the truth of the matter is, retirement plans are all about baby steps. You don’t need to deduct 50% of your salary for retirement; even a 5% deduction every month goes a long way.
You can sign up at your employer-sponsored retirement plan at work. Payroll deductions can be taken out of your paycheck, and the amount goes straight to your retirement fund. You can also do this individually by setting up an IRA yourself.
Create a Three-Year Plan
This is very important. Creating a three-year plan allows yourself to focus on a goal that lets you achieve stability one step at a time.
A plan allows you to re-calculate your strategies if you think you’re saving too little or too much that it affects your mental health and everyday living.
Don’t be restricted by following the financial plans of other people. As the saying goes, “different strokes for different folks.” If you think the biggest part of your savings should go to an emergency fund because the industry you’re working in faces huge economic problems, by all means, do it. On the other hand, if you think your credit card is the biggest thorn in your side, pay it off slowly but surely. The plan should adapt to the current situation you’re in.
Remember to work hard to achieve each objective within your plan. Keeping this habit will always make you aware of what you need to achieve in order to become financially stable.
It doesn’t matter what generation you lives in. What makes a person successful and financially stable are good saving and spending habits.