While millennials are no longer the youngest adult generation today, they still continue to be one of the hardest plagued generations of all time, especially after facing various systemic financial challenges that caused them to undertake more student debt compared to previous generations. Of course, it’s worth mentioning that the stagnant wages have made it particularly harder not only to pay their debts, but also to advance and save more in life.
The good news is that millennials are still as financially savvy as ever, if not more, than their generational counterparts. More and more people of this generation are saving at the same rate Gen Xers and Late Boomers did, with some even buying houses.
With the different aforementioned factors, particularly that of student debt, wealth building seems to be a far-reaching goal for millennials. To help close the wealth gap and work towards success, below are some tips that millennials can take.
Match That 401(k)
Many companies today match 401(k) contributions and finding work within these companies actually make more sense in the long run. These employers match the same amount of an employee’s contribution up to a certain extent and taking advantage of this essentially means that you are getting more money for free.
While paying down a certain amount to make your employer match the full amount can be challenging, think of it this way: the money that you are paying is not taxed until you plan on withdrawing them for your retirement.
One of the best ways to help you save is through automation. With technological advances and numerous mobile applications these days, automatically depositing towards a savings and a retirement account will allow you to tuck away money for a rainy day and the future – even without having to see or spend that money first.
Automating savings and retirement funds also forces people to save and spend within their means. Even better, with people not having the chance to see their money in the first place, they would not feel any less deprives. You know what they say, out of sight, out of mind.
Tracking all of your transactions and finances may not be the most appealing for millennials as this can open their eyes to how they truly live their life, but it is a necessary activity to help you tick off your financial goals one by one. After all, you won’t know what you have been spending on without tracking it, right?
By tracking all of your spending on a regular basis, you can get a clearer picture of where your money is going, and by extension, how you can better funnel this towards your future retirement plans and how to better stick to a budget.
To start, going through account statements and using a budget tracker, such as a mobile app or software, can work wonders. This allows you to log your spends for the day wherever you might be and see an in-depth look into your spending habits through colorful graphs.
Millennials can feel like the world is against them with the various financial struggles they are faced with. But through these tried and tested tips, they can certainly create changes in their financial health one step at a time.