Considered as the „best-educated generation in American history“ by Atlantic Magazine, one-third of Millenials is holding a bachelor’s degree. Despite this fact, they can become the first generation in American history that may become worse than their parents as their incomes are lower, they have more debt and poverty rate is higher.
In order to succeed, Millenials must be well-prepared for the future because the world is changing rapidly. With these 3 strategies, they will be on the right track to be financially secure and the possibility of their success will be much higher.
- Spend less than you earn
Most Millenials living from paycheck to paycheck and use credit cards in case of emergencies. In that routine, they expect higher income and lower expenses which are totally insecure and rarely pays off. No one can make progress if expenses are bigger than the earnings.
Having a financial plan and self-control in early life is the best way to develop financial security whatever the future will be. Deciding on regular saving using a zero-based budgeting system, you will create enough funds in the next month for the emergencies or save for home purchase, education of kids or retirement.
- Never make debts
Although, for most of the people avoiding debts is unrealistic, making the decision to never borrow the money should be imperative. If you spending money that you don’t have, it’s considerably lowering your future earnings and options.
Borrowing money is justified only in some case such as buying a home, refinancing high-interest debt and taking a short-term loan to make a contribution to the 401k employer-matching retirement plan.
- Set your financial priorities
With early saving, having a fund for health insurance and emergencies should always have the priority. Struggling to pay large medical bills is a cause of bankruptcies for 600,000 people each year.
Millenials are healthier than the people from previous generations, but they are not immune to many events that can cause significant medical bills such as obesity, childbirth, sports injuries, accidents, and desease.
Millenials are less in danger of having chronic health care problems, but traumatic injuries always can happen and these can cause a significant growth of your medical bills.
Emergencies happen often, so it’s always good to be prepared for it. Relying on quick credit or borrowing the money from other sources cause the damage to your saving plans.