Millennials are America’s largest demographic group with a population of about 80 million, forming its economic backbone. However, millennials have peculiar financial behaviors and tendencies. For instance, many lack the financial discipline their parents had in their youth. However, that doesn’t mean they can’t plan their financial lives. It just happens that they respond to finances and financial planning
Fortunately, this demographic group can still pull up its socks and control its financial destiny through proper planning. This post shares seven top insights to help millennials upgrade their financial planning skills. Keep reading to discover more.
Assess Your Spending Channels
It’s difficult to plan your earnings if you don’t know how you spend them. Therefore, start by auditing your expenses. It’s critical to track your cash flow and even critique yourself.
When tracking your expenses, check out where your money goes. Also, establish and question why you have been spending cash on certain items or services.
What behaviors and trends do you see? Were those expenses necessary or luxuries? Were they planned or impulsive? If you can give an honest reply to these questions, you are on the right path.
Moreover, question how you finance your expenses. If they were debts, were they emergencies that were matters of life against death? This stage will expose your real financial maturity and sense of responsibility. If you find that most or some of the expenses you spend on were rushed, it’s time you adjust. Otherwise, you will remain a poor financial planner and steward.
Deal With Debt
Deal with debt if you are in debt. The reason is that many millennials are debt-trapped. So, take time and ask yourself how you entered into debt and why.
Additionally, analyze all your debts and draw a repayment plan based on their priorities. For example, credit cards usually have high-interest rates; therefore, pay them first. Inversely, debts with tax-deductible interest, like some student loan types, can wait.
It’s also critical to formulate a debt avoidance plan and stick to it. For instance, resolve that you won’t borrow money unless it’s for emergencies, investment, or self-development purposes, like further studies.
Always remember King Solomon’s warning: A debtor is his lender’s slave. So, stay away from debts because they will erode your dignity and freedom. They will also pull you back and slow your financial progress.
Develop Financial Literacy
You will remain a poor financial planner and steward unless you acquire financial literacy. Developing financial literacy enables you to make accurate and confident financial decisions, an essential ingredient of sound financial planning.
Financial literacy doesn’t necessarily mean getting a formal education. You can learn from all available channels as long as they’re credible and competent. You may educate yourself online or seek counsel from people who have made it in this field. Whichever way, learn and keep learning.
Save Enough for a Rainy Day
This point can’t be overemphasized. The COVID-19 pandemic says it all. As late as January last year, who knew that Coronavirus would render over 50 million Americans jobless within nine months? How many of them have regained their lost financial glory?
Well, this instance should teach you to have an emergency kit to sustain you and your family for between three and six months. Anything can happen in life. You could get fired, or your employer can close business. You may get sick and stay out of work for months. Whatever the reason, save for a rainy day to avoid sinking into debt.
Get a Financial Planning Coach
Have you ever seen any successful coachless athlete in any sport? Mention them all, and you will find that a coach is behind every accomplished athlete! Talk of Lionel Messi, Ronaldo, Serena Williams, or Tiger Woods; all of them have a coach.
You, too, can’t make it in this financial jungle without a mentor or coach. These professionals can help you get the most out of your financial plans and detect hidden and costly holes in them. Remember King Solomon’s immortal words: Plans fail for lack of wise counsel, but they succeed in the multitude of counselors!
Determine Your Financial Goals
You need to set realistic goals to help you plan well. Otherwise, you will be like a soccer player sweating with the ball around the pitch with no goal to shoot at. You can perfect your goal-setting skills by boosting your financial literacy and consulting a competent financial advisor.
Create a Personal or Family Savings Plan
Lastly, create a personal or family savings plan to enable you to achieve your financial goals. Like goal-setting, you can sharpen your planning skills through practice and consultation.
There you go with the seven little secrets to help you have a huge financial planning impact. The ball is in your court to plan your financial life.