Despite stereotypes, many millennials are actually very serious about personal finance. The internet generation might not have the retirement savings of their parents, but they are more likely to avoid consumer debt and less likely to overspend on their homes. If you’re a young person looking to get more serious about your finances, here are some basic tips to get you started.
5 Personal Finance Tips for Millennials
- Do your homework on insurance: There’s no way to get around it, insurance has gotten much more complicated in the past few decades. Health, car and home insurance can be massive expenses. Taking the time to comb through the details and thoroughly research your options will save you thousands. It might be tedious, but it’s an essential step for getting a handle on your finances.
- Debt before investments: When asked for money advice, Mark Cuban stressed that before you do anything fancy in the stock market you should pay off your credit card debt. This is excellent advice. Interest rates can be outrageous, and waiting too long to pay debts can hurt your credit score. Paying down consumer debt will save you money on interest rates and give you peace of mind.
- Pay yourself first: When you build your budget, you might try to pay for all your expenses, and then put whatever is left into savings. Instead, most financial advisors tell you to allocate a portion of your income straight to savings, then budget around that. This will force you to live within your means and save for your future.
- Find a job you deserve: If you have marketable skills or a college degree, don’t waste your time at a dead-end job. Sometimes it’s necessary to get by, but avoid getting stuck. Get a job that matches your qualifications as fast as you can. Waiting too long can have a big impact on your life-time earnings and future income.
- You are your own best investment: If you are considering getting more education and learning new skills, go for it. There is not better return than betting on yourself. Do what you must to become a skilled and marketable professional. That investment will pay off for your entire career.
Whether you are just hitting the workforce or you are already an established professional, keeping these basic personal finances principles in mind will help you save for your future. The more disciplined you are when you are young, the easier life will be for you down the road.
Kevin D. Judd is a DC bankruptcy lawyer who fights to provide his clients with a gateway to financial freedom.