When it comes to money matters, millennials are infamous for how different they are from their parents while dealing with finances. Including the rise of earning capability over the years and access to more luxuries, this generation has also seen a drastic rise in inflation and with it the ease with which credit can be obtained. This generation believes in working hard and playing even harder, making them easily prone to impulse spending.
The average millennial believes in experiencing life rather than investing in the future. With the ever-growing influence of social media combined with peer pressure and the constant need to have the best of things, the concept of saving and managing money better has taken a back seat.
Saving can be a tricky concept for this generation, if not managed in the right manner without having to give up the comfort and luxuries that they’re used to. Here are some money management lessons for the millennial to ensure a more secure financial future.
Start Saving Early
We cannot stress enough on this! Starting to save in your younger days might seem like a waste for most, however, the importance of starting as early as your first paycheck can go a long way. Putting aside even a little amount of money every month can help during a rainy day or even for a larger purchase down the line, without having to take the burden of debt.
Tracking your Expenses
With the advent of the technological boom, many day-to-day tasks have gotten simpler for us. The cumbersome process of writing down each spending has been replaced by smarter money management apps. With an array of expense tracking and budgeting apps in the market, you can easily keep track of your expenses while having a foolproof budget right at your fingertips. If followed through religiously, expense tracking can not only help you define a spending limit but also provide you with the visibility of your expenditure. This ultimately will help you determine what is it that you can cut down on and also aid in saving.
Build an Emergency Fund
The COVID-19 pandemic put a tremendous amount of financial strain on most families, with a lot of businesses shutting down to professionals losing their jobs. This episode was a rude shock and also a lesson to most millennials. Having a solid emergency fund is crucial in this day and age where the possibility of unforeseen crises can crop up easily. Putting money towards this fund can also prove useful in cases of big-ticket purchases without having the need to take on debt.
Research Before Impulse
The world has not seen a wider variety of products and services available for the consumer. With banks and financial institutions making it easier by the day to buy everything from cars to vacations, it is far too simple to indulge in the best of things. This can have an adverse effect on most peoples’ finances if not managed carefully. Ensuring that you do enough and thorough research before impulse buying products can help you save more in the long run.
Credit Card Management
Credit cards can prove to be a bane or a boon, depending on how you manage them. Credit card debt is one of the worst debts to have and can get even worse if not paid off in time. With interest rates reaching the sky, making minimum due payments can cause a huge dent in your finances. Making full outstanding payments on your cards can save you a lot of money and also help you build a stronger credit score.
Building a secure financial future requires some amount of discipline and self-constraint. Managing your money effectively is not at all tough if taken care of a few basic things. Starting early will only benefit you in your future, making you independent in all walks of your life.