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Money Management for Millennials: 3 Steps to Financial Independence

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Millennials are quite known for living in the moment, or as they call it, YOLO. Instead of looking into business investments, talking to realtors, and planning to settle down, they clamor for new gadget releases. Usually, this behavior is likewise being attributed to their lack of economic proficiency and basic investment knowledge compared to the older generations. It often results in them not knowing the benefits of early investments, not taking the risk to grow their savings, or worse, not being economically prepared for life. It additionally restricts their opportunities to lasting wealth accumulation and also high investment returns.

Despite this, millennials are claimed to be stressing way too much regarding money, and it is because they want to live happily and fulfilled.

On the other hand, saving for retired life is another area that the millennial generation needs to improve. Millennials have limited expertise and understanding of pensions as well as retired life planning. They don’t even know much about the contributions from their saving accounts and how much they will be able to expect once they retire.

If you are a millennial who can relate to the concept of YOLO, then you will be able to relate to the following, too.

1. Practice delayed gratification.

Say no to impulse buying! Understandably, online shopping is always knocking at your doorstep, but you do not need to buy something every month and call it rewarding yourself. Distinguish your needs from your wants. However, it can be easy to acquire a product the minute you want it, so try to sleep on it first. Delaying purchases can assist you in figuring out if it is a need or not.

Furthermore, you need to take care of your things better and hold on to what you have. If you can still use your laptop for work, then buying a brand new one can wait. If your smartphone is still functioning properly and its specs aren’t outdated, you don’t need the new iPhone 13. You want it. See, postponing and thinking about your purchases will help you spend less and save more.

Even if you have the money, always try to find the most effective offer. Try to counter the impulsive thoughts by reminding yourself of how hard it is to work and earn money. In this situation, you will have the chance to consider the advantages and negative aspects of purchasing something.

2. Start to invest.

It is not nearly enough that you have an interest-bearing saving account. Investments are an excellent means to expand your hard-earned cash with time. For some individuals, the concept of investing can be exciting and terrifying at the same time, but being knowledgeable and aware of your financial investment choices will undoubtedly help you choose the suitable financial investments that match your lifestyle and personality. You can start a small online business or even gather your friends and start your local service. If you put your heart and mind into it, you can achieve anything.

Others invest in stocks and real estate; both industries are booming but filled with uncertainties. When you venture into these investments, you have to be determined, focused, and brave, as anything can happen in trading. Regardless, it is better than invest money in material things.

money investment

3. Don’t forget your emergency fund.

The cold hard truth of living is that someday, you will be frail and sickly, and without a trust fund, you will not be able to afford quality healthcare. So, as early as now, save for your emergency fund. Pay your rent, spend money on food and clothing, save some, and spare some for your emergency funds. It is constantly an excellent idea to have separate money in your savings account that you can use for emergencies. You don’t want to confuse your savings and your emergency funds together, as this mindset can cause you to this single pool of money anytime you want.

Other than this, saving for an emergency fund can likewise be good training for you to practice the habit of saving up. Technically, you should at least contribute 10% to 15% of your monthly income to your emergency funds. So if anything unfortunate occurs, you have the cash in hand. Start small so that you won’t notice it that much, and you’ll realize that it has grown from a hundred bucks to two grand in no time.

Final Words

Millennials already have a bad reputation in the workplace for job-hopping so much. What people don’t know is that this generation is driven by passion and happiness but is sometimes struggling with responsibilities. So prove them wrong and start saving today.

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