4 Money Management Tips For Young Professionals (The ‘Millennials’).
Generation Y is commonly characterized by its familiarity with communication, media, and digital technologies and a neoliberal upbringing.
However, since the recent financial crisis, Millenials have also been marked by economic instability and seem financially more at risk than their parents’ generation.
In this article, Michelle Blackmore gives tips to help Millenials better manage their money.
Various surveys have pointed that more than 62% of people under 30 suffer from financial instability.
That’s why it is very important for newly employed young professionals to manage their money efficiently in order to be financially fit.
So how can you achieve that financial balance in your life? Well, the following tips will help you reach that goal:
1. Be smart about your salary
If you just started a new job, the first thing you must manage is your salary. Set up a budget plan according to your needs.
This will also help you keep track of your expenses. Pay off your regular monthly bills, focus on saving more for the future, and set up an emergency fund for hard times.
2. Contribute to a retirement plan
Planning for retirement is vital, particularly for young adults. Most employers offer a private pension plan to provide their employees with retirement benefits (e.g. 401 (K) in the United States).
I suggest contributing at least 10% of your income before taxes to your retirement fund.
Retirement plans have several advantages for young people.
First, you get “free money” if your employer matches your contributions.
Second, you get to pay less income tax as contributions reduce the amount being imposed.
Finally, automatic withdrawals directly from your paycheck help you save without thinking about it.
Registered Retirement Savings Plans like in Canada can even help you fund your education or the acquisition of your first house.
3. Pay off your debts:
Several young professionals don’t realize how disastrous over-indebtedness can be.
They keep on splurging and neglecting their credit card bills and student loan statements until they get overwhelmed by calls from collection agencies.
So, once you have landed your first job, debt management should be one of your top priorities.
Then, once you become debt-free, keep the habit of paying off your balances in full as they become due. This will keep the load manageable enough.
4. Start saving early
The temptation to spend most of your money on frivolities as a young person might be there but in reality the secrets to becoming rich lie in frugality.
It is therefore important to save more to secure your financial future. With each passing year try to increase your savings.
The more you’ll save the better will be your finances. Plus, if you have rigorous financial planning it will not be hard for you to increase your savings gradually.
All these tips will not only help you manage your money more efficiently, but they will also strengthen your credibility.
Achieving financial stability will make it much easier to improve your credit score, which in turn will give you access to more advantageous financial products.
So, what are you waiting for? Just follow these money management tips and start your journey towards a financially balanced life today.
That’s all on the 4 Money Management Tips For Young Professionals (The ‘Millennials’).
This article was written by Meinna Gwet. Her specialty is in enterprise risk management for banks and insurance companies.