Millennials get a bad rap for being lazy and self-indulgent when the truth is this generation is really just discerning and savvy in a lot of ways many of us weren’t at their age. They’re not going to waste money on diamonds and cars but they will spend more money on things like dog food and craft beer. They want things to be efficient, so they like a lot of smart features. Just like any generation before them that’s hit this age, though, this is the time these folks need to start buckling down. Whether they like to think about this or not, they need to be saving for retirement. Some of them might already have a few tricks up their sleeves but many of them will admit that they don’t have a long-term plan. If you’re a part of this generation and you need some guidance, we can help. Read on for five money management tips for Millennials.
- Never Underestimate the Importance of Your Credit Score
If you said to yourself, “Credit score? What’s that?”, we’re not going to lie. You could be in real trouble. Your credit score controls everything from whether you can buy a car, apply for loans, buy a home, and can even affect your ability to land a job. Not ready to buy a home? It can still affect whether you get that rental you’ve been eyeing that’s closer to work. Those hoping to go the entrepreneurial route could be in real trouble with bad credit. As Ben Gold of Quickbridge Funding puts it via this Forbes article, “Millennials looking to become entrepreneurs need to understand that their personal credit might be the defining factor in their ability to access working capital. Getting approved for funding is challenging when the borrower’s credit score is low.” If you find out your credit score is low, work to bring it up by paying off or at least paying down whatever you can, paying bills on time, and resolving any other issues that were found on the report. Once you’ve done these things, you can open more lines of credit, which will also increase your credit score.
- Don’t Be Lazy When Getting Car Insurance
Yes, yes, we’ve all seen the Geico commercials. But there is something to be said for not being lazy about car insurance and just going with whatever your parents had you on when you lived with them. The Penny Hoarder recommends going to a company like Zebra, which will have you enter the year of your car and other information that will help to calculate how to get the best rate. We know you are diligent about doing this for all your tech purchases. Don’t phone it in when it comes to car insurance.
- Do Sweat the Small Stuff
We get it. You’re a millennial and you love your coffee. Adore it. You’d marry it if you could. But listen, that daily Starbuck’s habit is adding up, even if you’re just getting a good ole venti drip. We know you don’t clip coupons but you can look into happy hours and other less expensive ways to eat out. Not hitting the gym but a couple of times a week? Try something like ClassPass or go for a Groupon for Yoga instead. Consider carpooling or ride your bike to work. All of these things seem small but cutting them out could have a huge impact on your finances. It’s time to embrace the habits that encourage wealth and ditch the rest.
- Consider a Side Hustle
We use the term “hustle” but let’s face it, there are plenty of legitimate ways to make extra money outside your full-time gig. And you might want to consider this—at least for a while—if you’re hoping to get out of debt sooner rather than later. Whether you drive for Uber or Lyft on the weekends, teach an Art class, or make money using an app like Postmates or Swagbucks, you’ll be happy to see the boost on your bottom line. If you’re unfamiliar with how to find this kind of extra work, you can use a site like dollardaddy.org for advice.
- Dabble in Investments
It’s never too early to get involved in investments. You can even invest in real estate without a lot of capital. Get a money manager to help you. You might think he or she will be hesitant because you’re not flush with cash but this person will certainly want your loyalty when you do start making some real money. Stick with and, before long, you’ll have yourself a portfolio to be admired.]
And never forget to invest in yourself. Take the classes. Get that advanced degree you’ve been considering (as long as you have an idea of how to pay for it). If you’re hoping to get a new job that requires different skills, find a way to perfect those. You are your biggest investment.
Ignore the noise about your generation and focus. Try out these tips, buckle down, and watch your savings grow.