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The 8 Most Important Financial Literacy Tips for Millennials

Updated: Nov 6, 2022

Millennials are known for having everything handed to them and mostly, those things are not great. Millennials tend to be optimistic about their future and take on more responsibilities earlier than their older counterparts. However, with that comes challenges like a lack of financial knowledge and education. As the first generation born into the digital age, millennials grew up using technology before they even did. As a result, many of them struggle when it comes to managing finances and building a savings account. This has led to many millennials turning to third-party apps for help instead of banks or financial advisors. Unfortunately, most apps don’t offer much in terms of help or advice so it’s up to you to figure out what works best for your individual needs.

What’s holding millennials back?

Millennials are first and foremost digital natives. It’s no wonder they have so much trouble transitioning to a world where everything is digital. The credit crisis of 2008 changed the way banks did things and many millennials were unaware of what had happened. They grew up on the idea that credit was a given, not something that had to be earned. This results in millennials being more prone to overspending than their predecessors and also feeling like banks and financial advisors don’t take them seriously.

Financial Literacy Tips for Millennials

It’s not just about taking out loans. Credit card companies, peer-to-peer loan services, and even hospitals and insurance companies all have interest rates that can result in extra costs. If you aren’t careful, those fees can quickly add up and damage your wallet. Before you sign anything, make sure you fully understand the terms and costs involved. Establish good savings habits early and start putting money into a savings account as soon as possible. Invest in stocks and other investment properties wisely; they are not a guaranteed way to get rich quickly, but they are a great long-term way to grow your wealth. Make sure you aren’t overspending. Looking at your monthly expenses to try and find ways to save may seem like the best idea, but it isn’t the best way to approach the problem. Instead, take a look at your overall spending habits and figure out where you can cut back.

Set up automatic payments and tracking

This may sound like a no-brainer, but many millennials forget to do this. Set up recurring payments to contribute to your savings account. Instead of having to think about it every month, it will help chip away at your debt. Track expenses carefully and make sure that you aren’t accidentally overpaying for things. If you have a specific monthly expense like housing, make sure it is factored in when you are tracking your costs. Keep an eye on your credit score. The better your credit score is, the lower your interest rate will be. If you are planning to get a mortgage, car loan, or take out any other large loan, it is important to keep your credit score as high as possible. Make sure you are keeping your credit card payments on time and in full. If you are making payments that are a few days late, it can damage your credit score and lead to a higher interest rate on future loans.

Stay informed about current events in the market

On top of their own finances, millennials also have to keep an eye on the market. If you are planning to buy a home in the near future, it is important to know how the housing market is doing. If you are planning to invest in the stock market, you should also be aware of what is going on in the market at all times. Do your research and make sure you understand the ins and outs of the various companies. Get to know what they do and what their stock price is. If you know the basics about a certain company, you will be better equipped to make an informed decision on whether or not to buy their stock. Know how to protect your money if the market takes a downturn. If the market does go down significantly, make sure you have a plan for what you will do with your money. A good rule of thumb is to protect your money as much as possible while it is still in the market. Once it is in a safe place, you will have to do a lot less work to protect your money.

Establish a routine to help you stick to your routine

There is a lot of pressure on millennials to succeed in life. With this in mind, many of them don’t take the time to figure out what works best for them. Instead, they end up trying new things and falling into old patterns that don’t work for them. This results in millennials feeling like they have no idea what they are doing and falling even further behind the curve. Setting up a routine where you eat, go to bed, and do other basic things every day can help you establish some order and calm. This will allow you to better focus on what is happening in front of you instead of what you haven’t done yet. Making time for yourself will help you better deal with the stresses associated with college and your daily life. It will also make it easier to stick to your budget and plan ahead for your future financial goals.

Final Thoughts

Millennials have some great traits that make up a huge part of our society. However, millennials also have some challenges that can hold them back from making the most of their finances. These tips will help you better navigate your money as a millennial. To know more about the basics of payments and finances, check us out here.

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