During your 20’s, you encounter many life changes. From graduating from college, to starting work, to getting married, buying a home and more – there’s a lot on your plate! However, from the start of your career, it’s crucial to know how to manage your finances to avoid future financial strains and set yourself up for success! Here are a few good tips for Millennials to get started with money management:
Make a Savings Plan
Making an actionable savings plan from the get-go is the best way to ensure you’re saving enough money and setting yourself up for financial success. It is advised to save at least 15% of what you earn monthly each month. Setting up a separate savings account specifically for income savings is a great way to ensure you’re meeting your savings goals. Additionally, you can also direct a portion of your direct deposit payments into a specific savings account to make your savings automatic!
There are many budgeting apps, money-saving apps and online courses to learn about financial strategies and understand your spending and savings habits. Take advantage of them to set up a savings and financial plan that works for you!
Create an Emergency Fund
If possible, it’s always advised to have a decent amount saved to cover at least three months of your living expenses. It can come in handy if your employment shifts or you encounter life events that re unplanned.
Eliminate Wasteful Spending
Get rid of wasteful spending by evaluating your spending habits. Differentiate between your needs and your wants to determine what you need to actually be spending vs. what you are spending now. Cutting down on things like going out to dinner, shopping, unplanned grocery trips without a specific list and more can help you cut down on discretionary expenses.
Working with a financial planner can be a great tool to help you manage the money you make. Do your research to find an experienced financial planner that can help you evaluate your opportunities and help you decide on a financial plan that works for you.
Do you have a 401K, IRA, Roth IRA or some other account set up to save for retirement? It is important to start saving for your retirement as early as possible. Research your employer’s retirement options and speak with a financial planner to explore personal retirement savings options to find a retirement savings strategy that works for you.
If you’re ready to manage your money and open the accounts to help you meet your financial goals, contact Mechanics Cooperative Bank today!