For most of us, finances can be a tricky game. In fact, when you factor in forecasting, investing, saving, and spending, keeping up with it all can practically be a full-time job. However, being financially secure is one of the most rewarding experiences someone can have, which is why it’s especially important for young people to get started early on planning for their future.
Believe it or not, millennials aren’t as bad at their finances as older generations might assume. Their access and use of technology have streamlined a lot of good practices (such as keeping track of spending and saving), and they’re actually pretty diligent go-getters when comes to using tech to make money, too. However, there’s still a few things I’ve found that could help younger generations have a better grasp on their money for the duration of their financial lives. Doing so will provide a level of stability that will follow them into having a sound, secure future...here’s how:
Start Investing Early
It’s never too soon to start investing, especially for millennials. With technology, this generation has more access to information and forecasting right at their fingertips. Putting money into the market is no longer just a rich (or even older) person’s game considering there are a ton of apps out there to help you get started. While most of these services have the long-term goal of saving money (which, isn’t as attractive to younger people), it can be a great way for them to get their feet wet into how the market works.
Get A Secured Credit Card
Even though most millennials don’t have a credit card, they can be one of the best ways to start building a solid credit score. However, what scares millennials isn’t necessarily just the idea of owning a credit card, but rather the interest rates that have plagued previous generations. That’s why I suggest getting a secured credit card to start out.
Secured credit cards are lines of credit that you essentially are loaning to yourself. For example, if I put $250 in a secured card then I’d have a $250 max credit limit. The reason for doing this is you never end up getting in a hole while simultaneously building up your credit when making monthly payments. In short, this is one of the smartest ways to build up credit while providing a solid financial backing.
Create A Financial Forecast
Honestly, this is a piece of advice that anyone should follow but especially for young people starting out. A financial forecast essentially is a map of all the ways and places your spending money. A lot of banks have begun to implement them into their checking accounts, modeling it after companies like Mint. The repetition of doing this helps put money in the perspective of where it’s going and why, something imperative to keep in mind for later years when bills start coming in.
Use Tech To Improve Savings and Earnings
The internet is a godsend when it comes to saving money. Not only do a lot of banks online automatically have savings accounts, but there’s numerous other tools that are helping young people save in other ways too. For example, searching for group discounts, as well as used equipment/clothing. Additionally, there’s a huge market potential for people to make money on their own as well, such as rideshare and delivery apps. Overall, the opportunities to use tech to increase the health of your financial picture are endless, so use them wisely.
Plan For Rainy Days
Even for adults it can be difficult to forecast the future. We just never know what’s going to happen or when, as well as how much it will cost. However, planning ahead is going to to be one of the most worthwhile things you could. Off the bat, some simple things you could do include setting up a separate savings account strictly for an emergency, as well as possibly invest in some life insurance.
While we tend to think of life insurance as this thing only older generations get, the cost/benefit of it far outweighs any potential consequences that might instill younger generations. Take the time to invest in your future, and I promise the returns will put you at ease.