Millennials are known for many things, but effectively managing their money isn’t one of them. As the generation that’s become famous for being unable to purchase homes because they buy too much avocado toast, millennials need some serious financial rebranding. Luckily, with a few simple tips and tricks, you can start living your best financial life.
1: Stay Woke About Money
Although millennials are often the subject of criticism when it comes to their spending, they’re also known for their social awareness and activism. If you already take time to dive into learning about issues you care about, why not add money to the roster?
Take an online financial literacy class, revisit your Econ101 textbooks, or get advice from someone older and wiser—your newfound know-how will give you the freedom and comfort you need to help the causes you care most about.
2: Get Your Credit Score on Fleek
You probably don’t spend a lot of time thinking about your credit score—but you should! Having good credit (and keeping it that way) is going to be a major key when you start making financial moves.
Here are a few benefits of keeping your credit game on point:
- You’ll be more eligible to buy a house.
- Landlords won’t hesitate to rent to you.
- You can increase your credit limit.
- Lower interest rates will be at your fingertips.
- It’ll be much easier to take out loans.
While you should always be conservative when using credit cards, you shouldn’t be afraid of them either—credit makes the financial world go round, so you’ll want to nurture your own credit so you don’t get the spins.
3: You’re Going to Have to Start Adulting
Having to do taxes is one of the worst parts of adulting. But you’re going to have to do them—and do them correctly—if you want to hit your financial stride. Unless you’re a unicorn who can decipher the IRS’s mind boggling system of forms and figures, we recommend getting IRS tax help.
Whether it’s an accountant, TurboTax, or even your dad, this isn’t something you can afford to mess up, especially if, like many millennials, you’re running a side hustle or two (or five).
4: Make Sure Your Future Self Feels #Blessed
Retirement probably feels a world away. While you may have decades of work ahead of you, that doesn’t mean you shouldn’t start planning for retirement now. By starting now, you’ll be able to ensure you get to spend your golden years on the beach, sipping on a piña colada.
Here are a few good ways to set your future self up for success:
- 401(k) – If you have a job with benefits, you likely already have a 401(k). The trick here is to be active when it comes to your fund. Don’t hesitate to ask HR about the ins and outs of your plan and look into maxing out your contribution.
- Roth IRA – If you’re a freelancer, or you just want to go above and beyond your 401(k), opening a Roth IRA is a great way to secure your future financial freedom. When you make contributions, you pay taxes upfront, meaning you won’t have to pay them years later when you cash out your fund (and will probably be in a higher tax bracket).
- Traditional IRA – The main difference between a Roth IRA and a Traditional IRA is when you pay taxes on the money. With a traditional fund, you’ll make pre-tax contributions, and pay taxes when you withdraw the money.
- Investing – As a generation who largely entered adulthood during a recession, it’s understandable that putting money in the market might scare you. But, if you’re saving (and you should be), you need to put your money somewhere it can grow. Don’t worry, some options are much more low risk than others.
5: Leave the YOLO Lifestyle to Drake
We hate to say it, but there may be some truth in the claim that millennials spend too much money on avocado toast. While there’s nothing wrong with treating yourself from time to time, if you want to improve your finances, you’re going to have to cut back on luxury fruit spending.
However, cutting back doesn’t mean you have to go without. Grow your own avocados. Start making your own iced coffee. You can still find things that spark joy for less $$$. Even Drake will be proud.
6: Being Basic Isn’t Always a Bad Thing
We get it, the prospect of fixing your finances can seem overwhelming. First, take a deep breath. Second, remember that one of the most basic pieces of financial advice can be one of the most useful. So here are some words to live by: start budgeting, keep budgeting.
You’ll thank us (or hate us) when you realize how much money you’re spending on take-out.
You’re Already on Your Way
Deciding you want to improve your finances is a big first step, and you’re already making progress just by reading this. It’s going to take some work, but you’re a millennial, and you already know how to hustle.
Now, go eat some (homemade) avocado toast.