04 Sep 4 Tips to Avoid Being a Broke Millennial
Jokey tweets and scathing columns may lead many to believe that Millennials are responsible for their own financial distress, but the truth is that this particular generation does deal with unique issues that previous generations did not. For instance, they may carry a similar amount of debt as previous generations—an average of around $36,000—but the largest source of their debt is student loans, while Generation X and Baby Boomers owe more for mortgages.
The new challenges that Millennials face have led to the joke tweets and columns blasting their inability to buy homes, splurge on jewelry, or go out to eat. If you’re at this particular point in your life, you may believe there’s no real hope. You couldn’t be further from the truth. Let’s take a look at some things you can do now to ensure a more secure financial future.
Visit a Financial Planner
It may sound like a nice but not terribly realistic thought to visit a financial planner at this point. After all, what finances do you have to plan? If you’re already struggling to make ends meet while working several jobs, the idea of building a retirement fund or emergency fund might seem unreachable.
When you work with the right professional, however, you can get a better handle on where you are and where you hope to go. You can reorganize your spending plan, investigate insurance and savings plans that meet your specific needs and identify goals to start working toward, however slowly that may be.
Discover Your Money Personality
Believe it or not, your attitude toward money could have a big effect on how much you have at any given time. If you’re a Funster or Whirlybird, there’s a good chance you’re spending your money before you have a chance to really make plans for it.
Your money personality will identify your strengths and weaknesses—information you can use to bolster the good and start shedding the bad. Even those with a great attitude toward money—such as Tortoises and Champs—can find new ways to improve their money personalities.
Create a Spending Plan
Armed with new information about your money personality and your financial goals from your planning professional, you can create a new spending plan. Be realistic with this spending plan, taking into account all the things you’re responsible for on a monthly basis. Start by counting up exactly how much you spend on pleasure purchases, too. You might be shocked to learn how much you spend on the little things.
When you’re aware of what you’re spending on non-essentials, determine how much of those non-essentials you could live without. We don’t mean you need to cut them completely. However, instead of eating out four times per week due to your busy schedule, maybe you could look into some meal prep plans or even meal delivery services that make cooking at home easier and faster. Instead of stopping for coffee on the way to work, maybe you could learn some new recipes for coffee drinks to make at home and take with you in a travel mug. No one should have to go without coffee!
Avoid New Debt
You might be tempted to apply for a credit card or loan as a short-term solution to make ends meet. The reality is that you’ll just end up with one more bill on your desk at the end of every month. Instead, work to come up with realistic ways to meet your payment obligations, even if it means sacrificing things you love for a short period of time.
Now, we’re not trying to be yet one more person telling you not to eat avocado toast or splurge on coffees. In fact, we think little pleasures like these help you get from one day to the next. However, you may find that your wardrobe spending plan could be slashed in favor of capsule planning or outlet options until you can make a few student loan payments. Your nights out with friends could be nights in for a while in order to get ahead on your rent payments. You really might be surprised how much money you could save with just a few small changes to your routine, all without the need for a new loan or credit card.
Now is not the time to panic. Now is the time to plan. We’re here to help whenever you’re ready to avoid being a broke millennial.