7 Financial Lessons that Every Working Millennial Should Know
Most schools, even universities, don’t teach personal financial management. It’s something that we learn as we grow and we get tips from adults we look up – parents, siblings, personalities, and more. Sometimes we become clueless on how to manage our money and where to start with financial management for ourselves. There are several self-help books. But in this age of smartphones and data connection, there are free blogs helping people to manage their finances.
To get started, take a look at these financial lessons that every working adult should know and apply to themselves:
Set your financial goals
If you don’t have any goals at all, it would be difficult to find a motivation and go on with your savings. Whether you want to have your own house or build your own company, you can start creating goals helping you out on how much you need to save.
Begin as early as you can
As soon as you get your first job, you start saving money. If you have heard the financial term “compound interest”, then you have an idea that it lets the interest of your savings to earn more interest. The sooner you begin saving up for retirement, then your money will have more time grown and earn more and more interest. Time is essential when saving up, so the sooner you start, it will significantly give you a good amount for retirement.
Live within your means
This may sound cliché, but you need to spend on things that are not beyond of what you make out of working. Don’t overspend and buy stuff that you can’t afford in the first place. If you want something, save money for it and don’t use your budget. One great suggestion is sticking with your budget.
Always create a budget and stick with it
Budget plays a vital role in saving up money and avoiding any cash loans and debt. It helps you to control your spending and making you stay on track with your financial goals. Yes, it’s easy to spend on stuff that you don’t need but it would be easier if you have a budget and a little extra. Always stick to your budget even if it’s too difficult.
Protect yourself with insurance
This is one of the proper ways to protect you especially when you get old and need medication. Insure yourself to protect your life and future. Insurance also helps in meeting your obligations to your loved ones once your time is up here on Earth. Start looking for insurance policy that suits you even if you’re still young. Insurance prepares you to face the future without fear.
Build a good credit score history
If you have a good credit score, it means you’re financially responsible. Using this, you can secure a good place to live and you’ll have a good price for it. You also get low interest for loans and credit cards. You only pay lower financial charges for the loans and credit card balances.
Understand and start building your emergency fund
No matter how much you earn and how much you owe with anyone, it’s a wise decision to get a portion from your earnings and put them to your emergency fund. Your emergency fund would cover unexpected expenses that are out of your budget. Example, if you become unemployed, emergency fund can cover some months of expenses. Emergency fund should be non-negotiable. You can put it in a bank or invest it with interest. Don’t stock your money at home or anywhere that doesn’t help in growing it. Consider investing in stocks but be careful as well.