When my then fiancé and I decided to finally get married, the first question we asked ourselves was if we’re ready to handle our own finances. We scoured the internet for finance advice for millennials before checking our abilities to manage our daily expenses. It wasn’t an easy process to go through, but it is possible if you follow the guide to a T.
While leaving with our parents definitely have its benefits—homecooked meals and clean sheets—there are drawbacks, too. Once you realized what these drawbacks are—different set of goals and ambition—you have to set off and start on your own.
Finance advice for millennials: Know how much you are earning
When you’re leaving with your parents, you won’t usually be required to pay for the house expenses. Your salary is your own. The first finance advice for millennials who want to live on their own is to know how much they are earning each month. This will help you measure what kind of lifestyle you can afford outside of your parents’ bank accounts.
Compute your expenses
When you are finally living alone, you have to pay for everything—house rental/mortgage, car maintenance, food, electricity, water, internet, gas, laundry, cable, etc. All these things you have taken for granted when you were still with your parents will start to suddenly matter. Jot down how much each of this item costs in a month to see how much you need.
Set up a budget
Once you have computed your salary and your expenses, you have to set up a budget. Deduct your expenses from your monthly salary. If the remaining balance is too low for a life insurance or an investment, you have to re-assess your monthly expenses.
How about taking out the cable, especially if you are not at home most of the time? Maybe you can take a car pool to work instead of having your own car? Insurance and investments will be the key to being an actual adult. You cannot take these out of the equation.
There are loads of financial advices on the internet about investing. Research about what works for you, and tap the resources of an actual financial adviser. This is not something you can put off.
Think of investing as your emergency fund. A certain portion of your money must go to investments or else, you’re looking at a bleak future. This is probably the most important finance advice for millennials.
— Freedom From The Rut (@Freedomftrut) September 22, 2016