Millennials aren’t the most frugal generation, but the unprecedented advances in technology are creating opportunities for this group of young people to succeed financially. By following the five tips listed below, you’ll be able to consistently grow your net worth while simultaneously saving up for your retirement years. Without further ado, here’s the four financial tips that every millennial should be practicing on a daily basis:
Start Small, Start Now
A lot of employers offer retirement accounts including 401(k) and IRA accounts that are designed to automatically increase contributions on a fixed interval. For instance, if you have a 401(k) account, you can choose to increase contributions by two percent every two months. This way, you set aside money for your future before you pay rent, utilities, and other recurring expenses. The good thing about this trick is that it’s a one-and-done trick that can grow your retirement account consistently without you having to know about it.
Waiting to save up can cost you more. The longer you wait to start investing or working on whatever financial goal you have, the more cash it takes to reach that said goal. To put this into perspective, if you only have three decades to save up, you’ll need to stash away $900 per month to secure a $1 million financial milestone with a seven percent ROI.
Start Your Own Business
Millennials are lucky in that they live in an era where it’s much easier, or at least more realistic, to set up a business. In fact, you can do most of the legwork through the web, from finding and securing a business name to getting seed funding from investors. Millennials are characterized for their burning desire for financial freedom and independence. They aren’t one to just be satisfied and happy working a 9 to 5 day job until their eventual retirement.
Start your business early so that you have the luxury of time to make mistakes. It’s also the perfect age to start one since you don’t have the financial pressures that commonly come with having children of your own. Furthermore, it’s an age where you start to pick up work and actually earn money, which you can use to fund your business prospects.
Invest Your Savings
Savings accounts are the traditional way to go when you want your money to grow. Unfortunately, even the highest interest-yielding savings accounts provide very little when it comes to ROI. Instead, invest your savings in stocks, currencies, cryptocurrencies, and other faster growing investment assets.
Open a broker account, like Robinhood or TD Ameritrade, and start buying company shares or currency lots. It’s a preconceived notion that people need a lot of money to be able to start investing. However, a lot of individual trading accounts offered today allow you to invest with as little as $50.
Avoid Fees Like a Plague
While you can’t really do anything about the ups and downs of the stock market or the cap on your retirement account contributions, what you do have control over are the fees and expenses on the side. Transaction fees on your bank services and investment accounts, monthly subscriptions on your entertainment material, and other costs are something that you can avoid with minimal impact to your lifestyle.
Other things you can avoid are the costly interest rates on your loans. If you need to apply for a car title loan, make sure you know the payment options available, whether or not there are any repayment penalties, and what make and model of cars the lender accepts.
As a millennial, you’re in a position to use technology to help increase your savings and returns on investment. These four tips, however, are not the only means of achieving your financial goals. There’s no one linear path to gaining the financial freedom that you seek. Proactively seek out ways to squeeze every dollar and trim the fat from your everyday expenses.