It’s never too early to start planning for a strong financial future. But good luck trying to get most 20- and 30-somethings to think seriously about investment management. That’s not to suggest irresponsibility, it’s just a matter of fact that most adults of that age are focused on getting a good job, working hard, and playing harder.
Personal investment planning is usually at the low end of the priority list for a majority of Millennials, and who’s to blame them, really? Keeping up with their monthly bills and having a little left over to go out and have a good time are challenging enough; financial preparation can wait.
But here’s the best part…it doesn’t have to wait. There are some smart moves that can be made now to start laying the groundwork for a substantial advantage on securing a robust financial future. Taking these steps now will prove beneficial in the long run and they don’t have to drastically affect even the busiest of lifestyles. It’s all about being shrewd and thinking ahead.
Frugal Budgeting
Learning how to budget effectively is one of the best moves you can make. Do you really know how much you’re spending each month? Getting a handle on how you allocate your income will help you budget smarter, and the best way to do that is through auditing your spending habits. Knowing what percentage of your income goes to the essential monthly expenses such as rent, utilities, student loans, and how much of it goes toward hanging out with friends at the bar and going to the movies will better prepare you to live within your means. Wealth management San Francisco is all the more important given the high cost of living in such a popular, expensive city.
However, budgeting isn’t about denying yourself these little luxuries, either. Rather it’s about being smart with your money so you can enjoy the things you want and not go broke doing it.
Start Thinking About the Future
You don’t have to put away a large sum of cash every month to prepare for forty years from now, but do start thinking about your financial goals. Buying a car, a house, putting some money away for when you do retire, these are things to give a thought to every so often.
If you’re working for a company that offers a 401(k), drop a few bucks into it now and then. Don’t feel like you have to match your employer’s maximum contributions yet. But a little bit here and there will start to grow, no matter what type of account you’ve set up to begin saving some money for retirement.
Know Your Options
If you do decide you want to start saving now, look into your options. A savings account at your bank is a good place to begin but there are other, better, places to put your money so that it works harder for you. Do some research into stocks, bonds, exchange-traded funds (ETF’s) and many other investment strategies that exist. You don’t need to be some financial guru, either. You could learn a lot by simply seeking out some smart advice from an investment consultant or picking up a few books at the library.
Know Your Credit Score
One of the biggest financial pitfalls most Millennials encounter is credit card debt. They apply for a card (or maybe a couple), rack up huge amounts of debt and ruin their credit score. That can be a tough hole to climb out of later in life, so be wise about debt and credit score ratings now. Making sure bills are paid on time and debt kept to a minimum will benefit you later when you’re trying to get a loan on your first home or even trying to rent an apartment.
Get Health Insurance
It’s mandated by law now, but making sure you have health insurance coverage in the event of a medical emergency will help protect you and your financial situation. Having to pay astronomical medical costs without being insured can set you back years, financially. It can ruin your credit rating and leave you with very little money in the bank.
It’s better to carve out a piece of your budget for those monthly premiums now in the event something should happen later. Even if your deductible for out of pocket costs is on the higher side, those will still be far less than you’d have to pay if you were going it alone.