Many millennials have a difficult relationship with money. The children of baby boomers, these younger adults’ face financial struggles their parents likely didn’t have to consider. Stagnating wages, rising costs of living, skyrocketing rental costs and house prices far exceeding those their parents had to fund; millennials have many monetary mountains to climb in order to achieve financial stability and prosperity. It’s little wonder that this is a generation who struggle to save.
Alas, we can’t turn back time and prevent previous generations from fuelling the economic crash, however, these five small money tips might help millennials put away just a little more each month. For even more finance tips for young people, take a peek at Wonga’s recent blog.
- Stop living paycheck to paycheck
This may sound like an insurmountable challenge, but the sooner you can save enough to stop living from paycheck to paycheck, the more stable your finances will be. Those who live for payday are at significantly greater risk of slipping into a debt spiral. With no savings safety net, any unexpected expense could lead you into a spiral of loans and repayments which can be very difficult to resolve without a stable financial foundation. - Save 10-20% of your monthly income
If you can put at least 10-20% of your paycheck into savings, you’re on track to building a stable financial future – according to experts. If you’re struggling to save, reappraising your finances and budgeting with the help of a handy money app might make things a little easier. - Get serious about your retirement fund
If you’ve heard this once, you’ve heard it a thousand times. Your retirement may feel like a million miles away, but with just 30-40 years left in the workplace, there is less time than you’d think to build a comfortable retirement for yourself. Putting your savings into retirement funds is a good way of making your money go further and will ensure you can enjoy a much happier future. - Explore investing and diversify your portfolio
Many millennials are very cautious of stocks and shares – perhaps because of the impact of the financial crash. However, smart, cautious investing can help many people to nurture their wealth and grow their finances.
If you have more than three months’ wages in savings, consider dipping your toe into an investment with a small portion of your savings. This will help you to develop confidence and understanding of the system. Make sure you only ever invest as much as you can lose, however – especially with less predictable investments such as cryptocurrencies. - Don’t panic about house-buying
Rising property prices and rental rates have made it extremely challenging for many millennials to get on the property ladder, yet many young adults list buying property as a high priority. Given unpredictable property markets, however, it may be wise for millennials to relax regarding house-buying. It may feel like you’re throwing your money away by renting, but saving for a deposit and shouldering a hefty mortgage may not make financial sense for you at this stage. Wait until you have reached a degree of financial stability before putting down a deposit.
