Millennials face a more challenging financial situation than previous generations. Wage growth has been sluggish, owning a home has become more expensive, and many millennials are weighed down by student debt. But there are steps that millennials can take to maximize their money. Here is a guide to budgeting as a millennial.
Create a budget
Taking control of your incoming and outgoing funds is the first step toward financial peace of mind. Use a spreadsheet or a specialist service such as Mint to help you keep track of spending and find potential savings areas.
Overcome bank balance fear
Millennials are less likely than older generations to check their bank balances. Anxiety over the numbers can lead people to wish the facts of their finances would disappear. Try to force yourself to look at your balance every time you withdraw cash from an ATM. Normalizing the process is the best way to overcome fear.
Watch your subscriptions
As subscription-based services have come to dominate our entertainment world, many people have found it challenging to keep track of what they are paying for each month. Keeping a dedicated list of subscriptions and their prices can help you to check whether you are using a service enough to justify the expense.
Pay off high-interest debts
Some thrifty millennials manage to save a little money from each paycheck, but these funds often sit unused in low-interest checking accounts, not helping to pay the interest on student loans, credit card bills, or other debts. Use discretionary savings to pay down debts instead of storing them in the bank in order to escape the exponential growth of interest payments.
Think about retirement
While retirement may be decades away, it can pay to begin saving whatever you can while still in your professional prime. Diverting earnings to a dedicated account such as a 401(k) allows you to accumulate interest and investment gains on your money before taxes are applied. Many employers also agree to match workers’ contributions up to a certain percentage.
Save every penny
Throw every last coin you receive in change into a jar. The total will soon rise. Coinstar machines stationed across the country will allow you to convert cash into gift certificates for free to use with Amazon and other major retailers.
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