Millennials – those aged 18-25 – have a financial war to wage. When 7 out of 10 college graduates are leaving in debt to the tune of $29,000 and hopping into starting salaries that can’t keep up, money is often a sore and scary subject. Knowledge is power, however, and these financial literacy lessons for Millennials from Titonka Savings Bank may help turn the tides for a more financially secure future:
- Spend like a student until you’re not paying like one. Some classmates may get a lucky break from the get-go, landing jobs with salaries that help them pay off their debt fast. Others hop into the workforce with a clean slate thanks to scholarships and grants that prevented debt. If you’re not in either camp, don’t spend like you are. When they’re buying new cars or moving to expensive cities, continue spending as frugally as you did in college until you can afford otherwise.
- Harness the power of compounding. Start saving ASAP. For a car, for a house, for retirement, it’s never too early to start setting aside a portion of your income for later. When faced with bracing against a monsoon of student debt, a consistent, small addition to savings can rack up big interest in the long-term.
- Take advantage of employer-sponsored plans. If your company offers a 401(k) or similar retirement plan, jump on it. Small, regular paycheck deductions create a consistent boost in your savings without the temptation of spending. Also, deductions reduce your taxable income, meaning less income tax is lifted from your paycheck.
- Cash isn’t always better than credit. Cash may help you limit splurge purchases and stick to a budget, but it can’t build your credit score. When it affects your ability to secure a loan, the interest rate you’ll pay on it, and at what credit limit, your score can’t be taken lightly. 35% of your rating is simply based on making your payment on time, so make monthly online purchases and grocery charges with your credit card so you can easily pay off your balance in full each month.
- You can’t learn everything online. Yes, the Internet gives access to tutorials and FAQs and budgeting programs that can help you manage your financials. However, it can’t fully replace the expert opinion of someone trained to diagnose and treat your unique financial ailments. Maintaining a relationship with a financial advisor is invaluable, as they walk with you through the peaks and valleys of your monetary journey and can guide you in the right direction.
Today is as good as any to learn how to manage your money. Give us a call at Titonka Savings Bank to meet with one of our advisors and kick start your successful financial future.