Millennials face some financial challenges or temptations that previous generations did not face when managing the money they earn. Because almost anything you could want is within reach with just one credit application, building up debt is more easily done than before.
This temptation and the ability to quickly obtain credit have made Millennials more susceptible to financial issues. Here are thirteen tips that Millennials (and other generations) can use to maintain their finances and stay out of debt.
Save on Your Car
Cars get more expensive every year. However, there are several ways to save on the purchase of a vehicle. You can lease or buy your car used. You can also seek to add upgrades to your existing vehicle that improve the car’s value.
You can also save money in the long-term ownership of your car by keeping up with regular maintenance. If you find a great mechanic, you can regularly bring the vehicle into them to have preventative maintenance done or catch issues early, saving money on repairs.
Only Use 30% of Your Income for Housing
Almost everyone wants a bigger and better house, a place with a bit of land, a garage for three cars, and a hot tub, but it is impossible to pay for it unless you get into debt. And that responsibility must be avoided at all costs if it does not make sense to have it.
Whether you rent or purchase your home, you mustn’t spend more than 30% of your income on housing. If a lender is willing to extend a more significant amount if you purchase the home, you must take control and keep it to 30% of your income. If you are leasing a home, look for homes to rent that stay below this threshold.
Having expensive vacations is out of reach of almost all millennial budgets. Saving for a vacation to pay cash for all the expenses is one way to vacation economically. Also, you can purchase packages in advance that are inclusive or find fun and exciting ways to spend your vacation.
While a vacation is meant to relax and getaway, if you overspend or put it on credit which can be challenging to pay back and much more expensive due to interest, you could end up causing financial stress.
Keep Luxuries to a Minimum
While your goals may be to own luxuries such as boats, motorcycles, or other expensive toys, you should keep these purchases to a minimum when staying within your means. If you decide to purchase such items, buying them on credit could be more expensive.
If you can’t live without these luxury items, you should either save for them and purchase in cash or buy them used. You could also consider sharing the purchase with others or leasing them to save on costs. Sharing the purchase with others or leasing them as you want to use them can save you big and still give you the feeling of having luxurious things.
Take Advantage of Discounts
Many people will buy the total price and never think anything of it. However, those on a budget should always be looking for discounts. Also, buying used or purchasing “fixer-uppers” can save significant money. You can also look for larger purchases at discounts or ding and dent stores. You can also look for sales, coupons, and other ways to save if you put a little effort into thriftiness.
Allot Some Fun
Though you should always be looking to save more and spend less, you can put some money aside to use to live life. Whether you treat yourself to dinner out, going to the movies, or getting a spa treatment once a month, it is okay to put money towards enjoyment.
Educate Your Kids
Most people with money issues as adults either had poor examples financially or never learned the value of a dollar. Every generation must take the time to teach their children the value of money, how to save it, and how to be good stewards of your income.
These money lessons can be taught through allowances and showing them how to allot the money. It would be best if you were teaching your children savings, investment, charity, and responsibilities. Teaching them about financial responsibility will go a long way to making them well-adjusted and successful adults.
From phones to computers to tablets, everyday usage devices are vulnerable to damage. You must buy protective cases and have rules to protect them from damage. For example, forbidding those using the computer from having drinks around could save from an accidental spill that will do hundreds of dollars of damage.
Be Careful with Debt
Avoid putting it on credit when you want to buy something if you do not plan to pay. The millennials often feel more comfortable if they postpone things for later. It is a mistake because everything must be paid for. If you do not know where you will get the money to pay, do yourself a favor and not buy it.
Millennials are undoubtedly well-prepared; however, when it comes to financing, they often show fear of going against the tide, as peer pressure and other social factors make them manage their income with little efficiency.
Regardless of age, we all want the peace of mind that we do what we can to ensure a good quality of life without compromising the future by living the present irresponsibly. To achieve this, pay attention and do not make these mistakes:
Saving Before Debt
When it comes to debt, it is necessary to contribute to pay it from the first day if you do not want to live enslaved by interest. However, if your interest rates are 6% or less, it is probably better to invest that money aggressively in the long term instead of repaying the loans before.
Generally, millennials are more likely to call themselves conservative investors than Generation X and Baby Boomer, mainly because they witnessed the biggest market crisis in decades during their childhood and youth.
Although the stock market will rise and fall, often uncontrollably, it is the best place to invest in the long term. Choose a fund with an accurate date closer to the year in which you will turn 65.
Paying for Luxuries on Credit
You need to be practical and prioritize. Sometimes you can have anything, but you cannot have everything. This is a new concept for many young people who grew up in families where there was double income and in which they had their wishes met almost immediately.
If you cannot pay your tastes in cash, choose the ones that suit you and postpone the rest until your income increases.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.