During my conversations with Millennials about personal finance topics I should cover, I heard from some they feared about their financial future. They’re concerned if they can afford their expenses in the future. Some believed they can’t afford a house so they will have to pay rent forever. Others worried about more and more everyday items, like food and healthcare, increasing in price. So when it comes to Millennials’ financial future, how can we secure it?
Securing Millennials’ Financial Future: Make Plans Now!
When I talked to Millennials about their financial future, many haven’t made any plans for it. Yes, they know they need to save for retirement, but that’s a default notion. Where Millennials falter is not picturing where they see themselves in the next few years. Where will you live? Will you get married? Are children on the horizon? What other big expenses do you see forthcoming?
The problem is I see many Millennials live for right now. Some don’t want to look to the future and plan for it because it’s scary, frankly. Others want to make sure they are financially secure but don’t know how. That’s the point of this article.
So with all this talk about making plans, how do you create one? Here are 3 steps:
- Determine your goals for this year, the next 3 years and the next 5 years.
- Monitor the past 3 months of spending and determine how much money you need for living.
- Develop a savings goal for each month.
When you have plan, that eases your worries and you feel better about your future. As a result, you will actually complete those goals instead of burying your head in the sand and hope for the best.
Securing Millennials’ Financial Future: Find Ways To Earn More Money
Many personal finance experts will tell you to reduce your expenses to help save money. While that’s good advice, Millennials can secure their financial futures by finding ways to increase their income.
That may include taking on projects at work to earn a promotion. Or you learn a new skill-set which leads to a raise in income. Finally, you may have to change careers to one that pays better.
With this step, don’t take on multiple jobs at a time to earn more money. While this works in the short-term, your body will break down from the constant grind. I work with people who have multiple jobs and they are tired constantly. Plus, the lack of sleep and added stress can cause illness. Unless you really need the money, focus on working one job and improving your skill-set to earn more money.
Securing Millennials’ Financial Future: Make Compromises Regarding Your Lifestyle
I know we don’t like to hear this, but some Millennials are entitled. Many of us don’t want to or won’t make compromises regarding our lifestyle.
When I talked to those who believed they couldn’t afford a house at all, I asked them what type of house did they want. One Millennials told me she wanted to live in a high-rise condo in the city’s center. As a result of that answer, I agreed with her she probably couldn’t afford that, as those condos (and their HOA fees) are pricey.
Another Millennial told me he wanted a large house (at least 2000 square feet) because he owned a bunch of stuff, a couple of cars and wanted space to work on his hobbies and grill. To make matters worse, he wanted to live in specific neighborhoods. Again, this choice made affording a house difficult, if not impossible, due to the high price tag.
I believe Millennials can afford their goals if they make compromises regarding their lifestyle. Take the two who want houses above. They could afford a house if they choose to live in the suburbs or a smaller house. I’m looking to buy a small house. Those come a smaller mortgage and less expenses for house maintenance.
This step will be difficult for many Millennials because just like the other generations, we have a standard of living in our minds we believe we deserve. It’s difficult to change that.
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