There are money habits that millennials make that are likely different from their parents. The great thing about being young is that there is still time to make changes that are necessary in order to have long-term success. Millennials often cite increased savings as a goal, but are also likely to hold a lot of debt.
Go On A Spending Freeze
One of the best ways to save money as a millennial is to agree to go on a spending freeze with other millennials. By going on a spending freeze, you will not feel left out when other friends are spending money on shows, eating out or anything else. If you feel like going on a shopping spree, instead, consider going on a clothes swapping spree if you would like to wear something different.
Have A Plan
The best thing you can do for your finances is to have a plan and take the steps necessary to stick to that plan. Find out exactly what you will need to earn a month in order to meet your financial goals. It is a good idea to speak with a financial planner to make sure that your financial goals are realistic and that you are saving enough for retirement. Then, determine whether you need to raise your income or cut expenses in order to reach it. In order to meet these goals, it is important that you do not become trapped in a dead-end job. If your job is not able to help you reach your goals, it is time to move on. However, since millennials change jobs more often anyway, this may not be difficult for most millennials to accomplish. But if you are the type who is likely to fall into complacency, it is important to push against this temptation and work toward changing your career and your income.
Have A Backup Plan
Make sure to have a backup plan when you run into financial trouble. One of the most common reasons for why millennials have financial problems is that they make bad financial decisions when they are short on funds. For example, millennials may rely too much on credit card debt.
Have A Retirement Plan
Begin your retirement planning with the first job that you get. If your company offers a 401(k) plan, take it as early as possible. You will want to setup automatic contributions to an investment retirement account. This will allow you to build wealth much more easily. The more you contribute to this account, the more you will have when you retire. Therefore, you should sock away a extra percentage point of your savings each year.