Every kid had a piggy bank sitting in their room, filled to the brim with change and maybe just a few buttons. As time goes by those ideas of saving for a new toy or game start to fade, and our minds focus on the short-term, present goals.
In your 20’s, it can be stressful feeling pulled in different directions when it comes to saving money for an emergency, a house, tuition, and even retirement.”With a trend toward marrying later in life, most of your 20’s are spent with little to no obligation to other people,” says Brandon Moss, managing director at United Capital in Dallas. “This is prime time to lay a sound financial foundation and develop key habits that will help you for the rest of your life.”
Millennials’ financial struggles are a natural consequence of being new entrants to the labor force. Two-thirds of them earn less than $50,000 annually, and they are more likely than Generation X (now mostly in their 40s) to spend more than they earn, according to the FINRA Investor Education Foundation’s newly released survey of some 25,000 adults of all ages.
Here are a few tips for Millenials to stay on top of their finances and still make the most of their 20’s:
- Pay yourself first. This old adage is crucial to savings success, especially when you’re in your 20s. One excellent option is to open a 401(k) through your employer. Have a set dollar amount or percentage of your paycheck sent straight to your retirement account every payday. You’ll start a savings habit, and you’ll never even miss the money that never hits your checking account.
- Control your spending. The less you spend, the more you can save. That doesn’t mean you need to live on Ramen and skip the late night iHop runs with friends, but it does mean that you should get in the habit of spending less money than you bring in each month. This may mean making some changes to how your spend money, although not necessarily. There are plenty of painless ways to save money. But when you look at the advantages of spending less than you earn, you’ll see that the sacrifices are well worth your while.
- Don’t take that call. This may not be completely related to financial advice, but this goes a long way. Don’t feel the need to respond to every text message, phone call, and email the second it reaches you. Once upon a time, it took longer than a minute to reach someone. People used stamps and envelopes; they had answering machines they didn’t check for hours, sometimes days. No one will die if you don’t immediately respond to every message you receive.