If you are a millennial then it’s time to create a long-term financial strategy. Here are a few things to consider:
A survey from PwC found that only 24 percent of millennials have basic financial knowledge. Many now argue that financial literacy should be taught in schools, but for many millennials this revelation is a little too late. If you’re lacking in financial literacy then you can begin by learning the basics of finances and then reach out to experts to get support with a sound financial plan.
Studies show that millennials aren’t seeking professional financial help. That same PwC survey found that only 27 percent of millennials have sought financial advice about how to save or invest. You don’t need to be wealthy or approaching retirement to seek financial advice. Instead, the earlier you can discuss your long-term plans with an expert, the better. BECU members can always talk to a financial advisor for help with investment planning or a financial health check.
According to Forbes, two-thirds of millennials have long-term debt ( student loans, mortgage, car loans), and roughly half feel overwhelmed by their debt. That’s not even counting short-term credit card debt. The best way to unburden yourself from troubling debt is to make tackling it a top priority.
Matt Schultz, senior industry analyst at CreditCards.com, recently gave some advice geared towards millennials in debt, “Make a budget: You can't create a meaningful battle plan to tackle debt if you don't know exactly how much money is coming in and going out of your household each month,” he told Forbes.
Schultz advises that once you have a clear idea of where your money is going, you can see where to make cuts, and then put those cuts towards paying off your debt.
Budget cuts are painful, it’s true, but it will pay off! Debt blogger Shannon Brown of GrowlingSlower.com has been there, and is now debt-free. “We were really surprised that once we made a plan to pay off our debt, it went much faster than we could have imagined,” she told BankRate.
Get a Handle on Unexpected Costs
A simple unexpected cost at $500 would leave 63 percent of millennials at a loss, according to an EY nation-wide survey. Everyone needs an emergency fund. Nerdwallet suggests you start small, at $500. The eventual goal is to have enough saved to cover three to six months of living expenses. That way if you lose your job, or have an unexpected illness or injury, you are covered.
These are just a few of the barriers between millennials and a financially healthy future, but with knowledge and a sound strategy you’ll be in a good position to achieve your financial goals. What are the biggest financial challenges standing in your way?