(ThyBlackMan.com) According to Entreprenuar.com “Millennials are notorious for their brief attention spans but they are thinking long-term about their financial futures. All advisors need to do is learn to communicate with them.” However, with a little know-how one can keep financial stress at bay. Here are tips on how to get started on the right foot as a millennial just starting in the workforce.
1. Be Budget Friendly. Having a budget is a critical first step. It’s the framework that keeps your whole money situation in place. Pay close attention to what may seem like little daily expenses. Starbucks run add up. Lunch also adds up. At $4 per day, five days a week, $20 per week multiplied by 50 weeks per year that’s $1,000 you’re spending on coffee each year, she says. Same goes for lunch. How about $10 a day for lunch that equals $50 per week times 50 weeks that comes to $2,500 for lunch!
2. Utilize the 401k. As soon as you can sign up for your employer’s 401k. Setting aside money now for your retirement allows it to grow over the long term and saves you money on your current income taxes. Most pros recommend saving a minimum of 10 percent of your pre-tax paycheck. If you do this from the beginning, you’ll never notice the difference in your take-home pay. Take into consideration what your job matches. This is free money.
The sooner you start the better to be really serious about saving, the experts advise that s diverting 10 percent of every paycheck into a personal savings account, in addition to your 401(k) payroll deduction.
3. Have Wiggle Room. Having money set aside for emergencies is key to avoiding financial disaster. This is your safety net. It will cover you if you’re in between jobs, and give you the freedom to leave a bad relationship or a job you hate. It allows you to sleep easier at night, knowing that you’ve given yourself some financial security. Ideally, your freedom fund should have enough money to cover three to six months of living expenses. You won’t reach that level overnight, but don’t let that discourage you: Simply set aside as much as you can each paycheck until you hit your goal.
4. Don’t Sit on Debt. While it’s important to build up your emergency fund and your retirement savings, there are a few times when other things take precedence. If you have high-interest credit card debt, you should shift your priorities a bit. Student loans, car loans, credit card balances, a mortgage a person’s debt burden can quickly become problematic, resulting in a lower credit score, which reduces borrowing power, and mounting interest, which makes it difficult to keep up with payments, causing issues with creditors. So commit not only to regularly pay down the debt you already have, but to avoid incurring too much additional debt.
5. Write It Out. Establishing meaningful goals both financial and broader ones and prioritizing them based on what matters most to you will give tasks such as budgeting more purpose and meaning, Spann says. Don’t just keep those goals in your head: Make them concrete by putting them in writing. A simple goal-setting worksheet can guide you through the exercise and help you solidify your short-term and long-range goals.
6. Education Goes a Long Way. You may have graduated from school, but that doesn’t mean that you’re no longer being graded. Your credit scores are the most important grades you’ll get outside of school. These three numbers play a huge role in your financial life, as they represent how responsible you are as a borrower. The factors that go into your score include how long you’ve had credit, your payment history, and your credit-to-debt ratio. Some basic rules to maintain good credit scores: Keep your oldest credit card open, pay your bills on time every time, and avoid maxing out cards. Also keep your spending below 30 percent of your available line of credit. You can track your score for free at sites like
CreditKarma.com and request one free credit report a years from each of the three credit reporting agencies at annualcreditreport.com. When it comes to planning your financial future, a little research goes a long way. Sites such as Mint.com and Bankrate.com also offer a wealth of resources on a wide range of topics relevant to Millennials
7. Know Your Taxes. Paying taxes is one of least fun parts of entering the grown-up world. But the more you understand what you pay, the better you’ll be able to minimize your tax hit. Take time to understand, even at a basic level, tax planning strategies to help you make the most of your wealth today and into the future. Some simple moves can help ease your tax burden:
Run your finances like you run your social life. It might be useful to set up a separate email account for your bills and financial statements so that they don’t get misplaced or accidentally overlooked. Also, set calendar alerts for key dates, such as bill due dates, open benefits enrollment at your workplace, and tax prep deadlines. Just Do It- Like Nike and get started, as a millennial you will benefit from it greatly. You can get rolling on many of these money strategies with only a few hours of effort. So take the time now to establish some financial goals, automate your savings, check your credit, and put key dates on your calendar. By starting your financial life on the right foot, you’ll be saving yourself years of stress, and gaining confidence about your money management skills too.
For more information on millennials money matters go to entrepreneur.com.
Staff Writer; Amber Ogden
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