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Did you know that over 84% of all millennials are facing some kind of financial problem? Whether big or small, the millennial generation, also known as Generation Y, face a lot of money issues and concerns. Born between the 80s and 90s, these millennials have only begun to enter either adulthood or the midlife phase. That means that they have a lot options and paths to consider, from finding a stable job to protecting their retirement funds.
Without exaggeration, Generation Y has faced some of the most baffling and frightening economic challenges in the world today. From the global changes and recessions to the highs and lows of the dollar, no other generation has gone through so much in such a short time. Don’t believe me? Here are the most pressing financial challenges that a millennial faces.
At this point, at the tail-end of 2022, a millennial will have survived two different kinds of economic nightmares. The first one happened all the way back in 2008 when the global financial crisis made its way into the US. With the fall of highly successful banks like IndyMac and the Lehman Brothers, housing and mortgage stocks worth billions of dollars practically became worthless. The financial losses were so bad that it took over a trillion dollars to bail out key organizations, like Fannie Mae and Freddie Mac.
The second one, a much more recent problem, is the ongoing COVID-19 pandemic and its effect on business. It’s only this year that people have come back to public venues and walked around without the need for constant social distancing. Still, even with vaccines and health precautions, businesses have had to either shut down or go online. Even as different companies start to build their stock back up, the ongoing inflation hike is making the journey tougher than ever. Given this and the 2008 crisis, it’s no wonder that millennials have found it hard to protect their finances.
Another shadow that looms over every millennial’s head is that of student and educational debt. Paying off your college tuition and bills is a constant battle for those in Generation Y. Whether you have overdue payments for your university or you took educational loans to make due, learning has cost a lot for millennials today. What’s worse is that some members of Generation Y even regret going to college, simply because the debt accrued is too high to compensate.
You might think that planning for retirement is an old person’s game. You’re probably imagining that having a retirement fund is only doable when you’re approaching your fifties or sixties. In other words, it seems too early to have that as part of your money problems.
However, it’s never too early to start planning for retirement. The sooner you send some cash to your post-career life, the easier it will be to fill out that bucket list. Otherwise, you’ll find it hard to set aside enough money for what you want, whether that’s traveling the world or providing for your loved ones.
Aside from retirement funds, lump-sum budgets are also disregarded by many millennials today. You and your friends might not see a point in making an emergency fund, especially if you’re still trying to pay off bills and debts. That’s also why an emergency fund can be so important later on. These backup budgets can cover you or your loved ones in case of serious emergencies, such as hospital visits or car accidents. It’s better to have some kind of money saved for an emergency, instead of facing money problems without any spare change.
You and several other millennials might think that insurance is a luxury that can’t be covered. Again, when faced with other issues, like overdue bills or rent, then it’s fair to see why. However, insurance is one of the most clever assets you can have in your life. It’s like an emergency fund, only that it covers a specific issue in your life.
For example, having car insurance can help you cover any damages caused when someone collides with you. While an insurance plan can cost some money every month, it offers you full coverage for whatever you need. Without one, you’ll end up using your own savings or salary just to get the car fixed.
You might have heard that having a credit card will only cause you financial pain. It’s easy to lose focus on how much you spend when all you have to do is swipe a card. That’s why you and other millennials might not want to get a credit card at all. It doesn’t worth the risk, right?
However, while a credit card needs discipline to work, having none can actually cause more harm. For example, those with low credit scores face higher interest rates for rent and mortgage payments. By building a higher credit score, you can save a lot of money as you tackle your monthly bills and debts.
Have you ever seen or faced a baby boomer who says “Back in my day…” before they rant about the past? As annoying as that may seem, the past might not be as bad as you thought. For example, studies have shown that baby boomers earned 20% more in their time than millennials do today. While you can blame that on inflation, it’s not wrong to see that salaries and work wages were higher in the past. In addition, they have also spent a lot more time honing their craft and overcoming money problems without the fancy tech we have nowadays.
Lastly, one of the biggest money problems that all millennials face is the lack of financial literacy. In other words, people from Generation Y don’t know much about handling and managing money. It’s not to say that they don’t want to; in fact, you and several other millennials might have serious questions about how to handle your finances. Things like investment, insurance, and interest rates sound so important, yet those of Generation Y know little about them.
That’s why it’s important for you and your friends to take time to learn about managing these things right now. Take the initiative to learn more about what you can do to save money, whether that happens through stocks or through bank accounts. Otherwise, you might find yourself losing a lot of cash without any idea of how to stop it.
Once you know what kinds of money problems a millennial faces, you can take the first steps to planning the right response. Whether you plan on saving lots of money or building investments, it’s important that you know what to do next. To help you reach them, here are some useful tips to making better and smarter financial choices.
They’d love to learn the ins and outs of different money matters, from rental payments to mortgages and taxes. Sadly, only about 12% of them ever get any professional financial advice from experts or advisors.
Take the initiative by going out and inquiring more about the payments you want and need to make. Ask people in your family, such as parents and grandparents, about how they save or spend money. Alternatively, you could also use the internet to research and examine these same questions. You’d be surprised how many people are willing to advise and help you out once you start asking, especially when it’s about money problems.
Imagine that you finally get your paycheck in hand. Think of all those hourly wages and long nights finally turned into cash, now resting at the palm of your hand. You’re filled with a rush of excitement and joy as you finally get the fruit of all your labors. So, what’s next?
Surprisingly, most millennials struggle with that question. They might quickly go and spend their money on something stylish or nice, from shoes to party drinks. However, think about the question more carefully. What’s next for you, now that you have some money in your life?
Do yourself a favor by pausing and thinking about what you want to afford. Perhaps you want to start paying off those student loans or save money for retirement. Even if you donate just a few dollars at a time, you can start building funds that can change your life. Think carefully about what you want next, or else your money will all go down the drain.
Another way to make money and build the assets you need is to cut down your losses first. Less spending means more funds, after all. That’s why you need to reflect carefully on what you spend to see which purchases matter or not. Once you realize what you can live without, you’ll find that there’s more pocket change in your hands than before.
For example, everyone wants to wear nice clothes. It’s normal to want to go outside and look both comfortable and stylish. However, many millennials make the mistake of buying only branded items. They want to have shoes or shirts that cost more than an arm and a leg, even if it takes most of their cash away, because it’s from Adidas or Nike.
Rather than wasting it all on a large wardrobe, consider cutting it down to two or three classy outfits. Try to make sure they can all mix and match so that you can have nine or more combinations ready. In addition, try to use the clothes you buy until they wear down. It’s better to wear out a nice shirt than to let a pricy one sit in the closet forever.
Lastly, when it comes to smart financial choices, remember to always invest in the future. What you invest in is up to you, whether that’s stocks in the market or insurance for your health. What’s important is that you remember to use some of your money to get potential benefits as soon as possible.
For example, if you’re faced with a Christmas bonus, don’t use it all up just to celebrate and be happy. Take some of it, say 15%, and put it to some practical use for your future. Perhaps you can negotiate a plan for a new scooter so that you stop spending on public transport. You could also start looking into bonds to help fund your debt repayments. The sooner you act and use your finances for something practical, the faster your money problems can be solved.
Do you want to break free from your financial burdens and start living the life that you deserve? I have the answer for you. In this FREE book I created, which you can download here, I will share real-world steps and techniques you can use to grow your money. Download it now before it’s gone!
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