Overcoming Financial Worries for Millennials

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Financial Worries for Millennials


Financial stress is a common thread through all generations; however, millennials are feeling extra pressure due to skyrocketing student loans, a competitive job market, and high cost of living. Despite this set of challenges, there are some ways to whip your finances into shape. Let’s take a look at some of the methods this generation can use to relieve financial anxiety.

Create a Budget

Rather than seeing a budget as rigid and limiting, think of it as GPS for your money. If you have a destination (like saving for a special occasion), a budget will map out what you need to get you there.

Not sure where to start? Search online for budgeting templates, and either use one you find or leverage it as inspiration to create your own with software like Microsoft Excel. It doesn’t have to be fancy, but it does need to be honest and realistic. Looking at the hard numbers might be uncomfortable, but remember that it’s part of building the road to your financial destination.

As any good GPS will tell you, sometimes you have to recalibrate. Your budget is a living thing that evolves with your income and priorities. So it’s good to revisit it regularly, e.g. quarterly, after compensation increases, etc., and adjust allocations as needed. And when you’re ready to level up, check out tools like Mint. It’s free and connects directly to your accounts to display your spending habits in easy-to-understand charts, allowing you to see patterns and make informed financial choices.

Trim Expenses

In comparison to older demographics, millennials annually spend $2,300 more on things like groceries, gas, restaurants, coffee, and cell phones. When you have a smaller budget to work with, it’s vital to focus on areas that matter most — think of these as must-haves. If having a nice cell phone or dining out with friends is important, prioritize funds to those areas and scale back on nice to haves like taking cabs, cable TV, or concert tickets, etc.

Baby Steps

The tiny hinge swings the big door. Translation: Small things accumulate over time to become impactful. There are countless ways to achieve this, such as:

  • Saving Change: Collect your loose change in a bottle and cash it in for paper money. If you prefer a digital approach, NerdWallet breaks down apps like Acorns or Digit.
  • Pay Yourself First: Build a reserve with automatic transfer to your savings account. You can set this up with your bank and choose the cadence and value of each transfer. Even starting with something small, such as $25 every pay period, will grow over time if left untouched. Added bonus: You’ll have a emergency stash in case you truly need it, providing more comfort and control in your financial life.
  • Switch to Cash: Credit cards are convenient, but if you struggle to pay off the full balance every month and are getting deeper into credit card debt, consider using cash as your primary form of payment choice you whittle down balances. If you have a credit card, commit to only using it for true emergencies. For those times when you need a little inspiration, here’s one about a Millennial who paid off her $8,000 credit card debt in 90 days. It can be done!

Becoming a stress-free, financial ninja means protecting your assets. There are many ways to do this, including using credit score calculators to see your overall rating and, in some cases, working to repair your credit to get back in good standing.

 

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