When we go from adolescents to adults, or from college to a working life, there comes a point when we naturally think about money more seriously. When you look around, whatever your financial situation may be, it could seem like most people are doing ok. After studying a bank portfolio of hundreds of consumers, I concluded that the truth is that most of us could improve our finances in some way or another. No matter what kind of position you are starting from, there are ways to incrementally better your financial life in the short term and in the long term. It is worth acting now before things get worse. Here at Money-Smart Millennials, we emphasize starting with a budget, the indispensable first step towards stability. Let’s take a look now at some of the smart things you can do to keep your finances in check and become financially stable over time.
Education is Important
We could argue that the effectiveness of higher education today is quite different than it was 20, 30, 40 years ago. A bachelor’s degree is becoming in many fields unnecessary. Moreover, the cost of higher education is unbearable for so many that in the end, college is just an option that can be avoided. Nonetheless, higher education still plays a role in higher income for those who are not the entrepreneur type. In fact, while an employee with only a high school diploma makes an average of $520 per week, a worker with a bachelor’s degree will take home on average $1,173 per week. In simple terms, having more education could lead to a better paying job. Today, universities are jumping on the online education train, making higher education available and convenient to almost anyone. Graduates from online colleges such Norwich University will tend to receive higher pay.
Do you think you could benefit from returning to school?
It is definitely a wise idea to save some money, a portion of your revenues, and you might find that you can do so more successfully if you make a point of saving a certain amount each month. A good rule of thumb to start with is 10% of what you earn each month. It is not easy for everyone, especially if your finances are tight, but it should be a goal. Even just putting aside this amount will ensure that you have something to fall back on in case of emergency. It is also a good starting point to start from: if you start with this threshold, you can then slowly work your way up to 20 or even 30%, and then further if possible. As you get good at saving, you will see what a joy it can be, and you will find that it makes a huge difference to your life overall.
According to an article by CNBC, only a quarter of the millennials population in the stock market. While investing is always going to be a gamble, the earlier you get on this train, the more you will learn about the whole process. Lots of people are reticent to embark on this because they cannot fathom the idea of losing. Keep in mind that your 401k is just another gamble. However, if you play it right, there are many ways to earn a lucrative side income. Some people are comfortable managing their investments themselves while others reach out to professionals.
It doesn’t have to be stressful to plan for your twilight years, but the sooner you do it the better. Of course, it can be argued that there is plenty of time to get this right. In actual fact, time flies by so quickly, that you don’t want to end up financially struggling during the most relaxing years of your life. Instead, start thinking about the best financial decisions right now.