The biggest advantage of being young is that time is on your side. But the sands of time trickle away at a rapid rate and this advantage will not last forever.
Many Millennials believe that having a financial advisor is not necessary. In fact, over 60% of adults don’t have a financial advisor of any kind. But the truth is, having a financial plan and strategy is not just for Baby Boomers with big paychecks and a wealth-building strategy.
Think about it, those struggling to save and pay down debt have the most to gain from effective financial planning. Here are some things that Millennials can do to maximize their financial well-being. Making a stable financial plan now is essential for setting up your future success.
According to statistics, the majority of Millennials are in debt, and it’s not just student loans — it’s credit cards that are weighing the most on this generation. Tackling your debts one at a time, starting with the highest interest ones first, is the best way to approach the issue. Find ways to pay off high interest rate credit cards, or consolidate and transfer to a zero percent rate. It's essential to pay off credit cards as quickly as possible to avoid accumulating interest and other fees that can be very costly.
Savings and Emergency Fund
Almost 50% of Millennials say that they have zero dollars saved. That’s ZERO. Life sometimes throws surprises your way. And if you save, say, 10% of your monthly income in a savings account until you reach the goal of having three months’ worth of income stashed away, you can avoid the shock of not being able to cover an unexpected emergency expense. Things like a job loss, medical bills, or other major expenses can be stressful and costly, so it's important to be prepared.
This is where young adults really do have the benefit of time on their side. But it seems that some Millennials don't fully understand the benefits of a 401(k). Many companies will match your 401(k) contribution up to a specific percentage, which is free money. Take advantage of that and contribute the maximum possible amount that your employer will match.
The future is unknown, but with a seasoned and well-informed financial advisor on your side, the future of Millennials’ finances could be very bright indeed.
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