Millennials have heard it all, already: they’re the “Me Generation”, they’re entitled; they have all the wrong ideas. Perhaps, this perception is why financial companies are in such a rush to help them out with their cash. It feels as if Millennials are easy picking when it comes to offering the service of financial advice.
Now, if you’re a Millennial, you’d probably want those companies to hold up. After all, you’re not necessarily representative of your whole generation, or vice versa. You have your spending habits, standards of saving, and ideas of how to manage your finances. And to be fair: we know that Millennials work really, really hard to get ahead and stay ahead.
Still, it helps to keep an ear out for pieces of advice worth hearing. Here’s some of the usual financial advice that a smart fellow with money would offer the today’s young adults:
1) You Can’t Control The Economy, But You Can Control Your Own Spending
Market forces change, prices rise and fall, and industries come and go. You can’t control all of that by yourself, but the one thing you can control, is where exactly your money goes. Wealth isn’t just a byproduct of a fat income; the wealthiest of people know how to properly spend as well.
That said, always live a little below your means. Even guys like Mark Zuckerberg dress in the simplest clothes. Remember that thrifty habits stack up over the months and years. Resist the urge, especially in young adulthood, to purchase things you don’t need.
2) Keep Your Investments Simple
As mentioned above, firms trip over themselves at the prospect of selling their financial advice. But don’t buy into the notion that investing is complicated. As shared by Time, you don’t need to consistently hop in and out of different types of investments – volatility ETF’s, precious metals and commodities, foreign exchange, and etcetera.
Keeping simple will go a long way: put together a portfolio of a stock market index fund, a bond market index fund, and just keep an eye on it over the years. Remember that investing is a long-term game.
3) Start Working On Your Retirement Fund Early
Setting aside a fraction of your income toward retirement – and assuming annual increases in your investments – will go a long way if you start earlier. Max out your retirement accounts with the knowledge that time is on your side.
4) Avoid Unnecessary Credits And Risk
Investing is great, and getting there’s nothing wrong with getting financial advice. But mind that your advisor has their own bottom line too, which may not necessarily match with yours. Clarify your relationship and get that out of the way as soon as you can. If they try persuading you to invest in something that might sound gimmicky, identify the risks in that.
Also, when it comes to owing others – credit cards, car loans, housing loans, and so on – keep it to a minimum.
5) Don’t Assume That Your Biggest Paydays Are Normal
This is a huge pitfall. Some people experience a great income month – due to a huge sale, commission, bonus, etc. – and change their spending habits to match it. But don’t assume that your best paydays are the norm. They’ll lure you into bad spending habits, and soon you might even find that your income can’t keep up.
6) Keep Track Of Your Progress
Don’t obsess over how much you have in the bank. But once in every couple of months, check in to see how you’re doing. And every time you check in, compare your progress with the previous months and years to determine if you’re doing as well as you think you are. Falling short of your expectations might indicate the need to change something.