Easy Money Goals All Millennials Should Have
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Here are some recent stats on the current financial situation of millennials:
1. Millennials earn 20% less income than their parents did.
2. Student loan debt for millennials has doubled compared to recent generations. There is now more student loan debt than credit card debt.
3. 1/3 of millennials between 18 – 34 live at home still (most-likely due to efforts to save money).
4. Millennials get married later in life and have children later due to financial and career struggles.
5. Millennials are still damaged by the recession.
Read more stats here and here.
Where does that leave the millennial generation and financial goals?
How should we handle the news that finances are the reason why millennials are buying houses later in life, waiting longer to get married and have kids, and still live at home with their parents?
The answer: set money goals NOW.
It’s never too late to set financial goals. In fact, goals are the only real way to achieve large purchases, security, and financial freedom.
If you’re the type of person who likes to live in the moment and rely on luck rather than set aside goals, that will eventually catch up to you. Having financial goals is just all part of #adulting.
Trust me, it’s not very difficult to set some clear money goals, and having these goals will make you feel much better about your fiannces.
Here are my best tips for easy money goals all millennials should have:
Establish a Solid Emergency Fund
If you haven’t already done so, get yourself set up with an emergency fund and start putting money into that each month.
Emergency funds are vital. In a way, an emergency fund is a special savings account because it holds money until you need it for an emergency.
A popular rule of thumb is to have at least enough money saved to cover up to 6 months of you and your family’s entire living expenses.
However, deciding how much money you want in your emergency fund is entirely dependent on your family’s living situation as there is no right or wrong answer.
Emergency funds are often in the back of peoples minds because it can be difficult to allow so much money to just sit in the bank unused. The point of an emergency fund is to think about the unforeseen future.
If something happens such as a medical emergency or an important appliance breaks in your home, you won’t have to stress out about where to get the money from to pay for the expenses.
Even worse, if you lose your job, an emergency fund will help you with a cushion of money to keep you on your feet.
An emergency fund also helps you sleep better at night knowing that if money gets a little tight, there are still finances set aside just in case.
Having an emergency fund might seem like a waste of time, but it is such an easy money goal all millennials should have.
Related: Guide to Millennial Investing
Follow a Budget – It’s Easy!
For some reason, it seems like millennials frown on budgets. The truth is, having a budget is a really smart thing to do is an easy money goal that all millennials should have.
So, why is a budget so important to follow? Here are just a few reasons:
- All your bills are accounted for
- You know how each dollar is being spent
- You can be as strict or lenient as possible
havebudget enough money for entertainment
- Work towards getting out of debt
The good thing about a budget is that it can be adjusted as you go and it helps to hold you accountable for your spending.
If you aren’t sure how to make your own budget, download this free budget template right here that will help you track your spending, bills, and goals!
Make a Student Loan Repayment Plan… Like Now
If you were to ask me what my number 1 money goal all millennials should have it’s getting out of student loan debt.
Student loan debt is a huge burden. We can all probably agree on that.
According to PEW research center, Americans owe more than $1.4 trillion in student loan debt.
The average person has approximately $40,000 in student loan debt and owes around $350 per month to make their minimum payment.
To put these numbers into perspective, there is now more student loan debt than there is credit card debt. In fact, student loan debt has surpassed credit card debt by approximately 3 billion dollars.
So, why is paying off your student loan debt an easy money goal all millennials should have?
First, a little bit about my story with student loan debt. When I graduated college with my undergrad degree in Communication, Public Relations, I was $30,000 in debt and my monthly minimum payments were over $500!
While most people would panic at those numbers, I had been prepared. As soon as I graduated, I crafted a plan to pay off my debt within 2 years so that I could live life financially free.
Through dedication, stinginess, and a ton of savings, I successfully paid off my loans in my 2-year goal. That meant that I was financially free by the age of 23.
While many people tried to convince me that student loan debt is “good debt”, I still recognized that debt is debt. I didn’t want to live the next 10 or so years owing money to the government. I wanted to be able to spend my money knowing that I didn’t have to pay $500 at the start of each month to a balance that only covered the intended interest.
Since becoming financially free, I have loved telling others in student loan debt how I achieved freedom in such a short amount of time.
Nothing feels better than being debt free. This is why paying off your student loan debt is such a hugely important money goal that all millennials should have.
It’s time to do better than just paying the minimum owed each month for the next 10+ years. Take care of that debt asap!
Find a Stream of Passive Income
Many rich and successful people make money while they sleep.
Warren Buffet once said, “If you don’t find a way to make money while you sleep, you will work until you die.”
This is where passive income comes in to play.
How cool would it be if you were able to make money while you are sleeping, hanging out with friends, or at the movies? That is the beauty and importance of passive income.
There are many ways to make passive income in our modern society:
- Amazon FBA
- Affiliate marketing
- Online courses
- Running an Airbnb.
While it typically takes some work to initially set up your stream of passive income, it is completely worth it when you are able to still make money while you are on vacation.
If that isn’t a money goal all millennials should have, I don’t know what is!
Get Out of Credit Card Debt
Credit card debt should not be ignored. I
While student loan debt tends to be ‘good debt’, credit card debt is definitely the bad debt. (I still believe that debt is debt regardless of how it’s labeled.)
If you’re in credit card debt, you’re paying interest, which is just more money out of your pocket in the long run. Trust me, it isn’t worth it.
It’s absolutely okay and realistic to want to live debt free, even if people try to convince you that “some debt is good for building credit”.
If you’re concerned about building credit, just know that it’s completely possible to have a credit card, pay it off each money, and still have excellent credit. Both my husband and I have credit scores in the 700s and we have no credit card debt.
Our trick: pay the card off with each paycheck. We love using a credit card because of all the travel reward points we get, but I refuse to pay interest! That’s why we always zero out our balance each month.
I’ve talked to so many people who have just accepted the fact that they will be in debt the rest of their lives, but it doesn’t have to be that way.
If you’re in credit card debt, dedicated monthly payments of just a little bit more than your minimum balance owed, you can get out of debt sooner. This might seem impossible or extremely difficult, but this is a money goal that is easily attainable with dedication.
I do want to acknowledge that everyone’s financial situation is different and it may be difficult for some to put more money towards paying off debt. That’s why it’s so important to sit down and figure out a financial plan that works for you and your family while also obtaining a financially stable life without living paycheck to paycheck.
Save, Save, and Save Some More
My absolute favorite quote regarding finances is from Warren Buffett, “Do not save what is left after spending; instead spend what is left after saving.”
I cannot express enough how important a savings account is.
Your money should not sit in your checking account. Even if you feel like you have a grasp on your spending habits, money needs to be frequently set aside into a savings account.
The reason it’s a bad idea to not have a savings account is
Here are some popular things people save money for:
- Housing Upgrades
Basically, a savings account helps to focus your money goals and it gives you the motivation to work towards an expensive purchase you want or need.
Personally, I have two savings accounts. One is for fun, and one is for emergencies. My other savings will just grow and grow until I want to take a trip or buy something big like a house.
Recommended: How to Save Money as a College Student
Set Short Term Savings Goal
One of the easiest money goals all millennials should have is short term savings goals.
Start with some simple math to determine how much money you need to set aside each month in order to meet your goal.
An easy way to do this is to divide your total number by the number of years you want to save: 50,000/10 = 5,000
Once you have the yearly amount, divide that by 12 months: 5,000/12 = 416
Once you come to the final number you should be setting aside monthly, decide if that amount is comfortable enough for you.
It’s okay to make adjustments to your goal.
It is counterproductive to set aside more money than you make or an amount that will leave you with no money to spare. Be honest about exactly how much money you can actually afford to put into the bank.
We all have bills that need to be paid and groceries that need to be purchased. Don’t jeopardize those necessities by dedicating to save an amount that will threaten your livelihood.
This is why it’s good to sit down and really evaluate your monthly income, bills, and basic spending habits. Once you do this it will be easier to come to a solid number you can set aside each month.
If a house is not something you want to save for, you can set a short term goal for practically any purchase. Just come up with your final number, do some simple math, and figure out how much money you need to set aside.
Cut Out the (hypothetical) Avacado Toast
I’m joking. Avocado toast is delicious. (If you don’t know the joke I’m referencing, read about it here. Trust me. This millionaire’s financial advice to millennials is ridiculously hilarious).
I’m definitely not suggesting you give up avocado toast as an easy money goal all millennials should have, but I do think that in order to save money as a millennial, some cutbacks need to happen. Small tweaks here and there in your spending add up.
Just like it’s easy to spend money extremely fast when you have a moderate to exciting social life, it’s just as easy to save money when you cut back. Here are some areas to consider cutting back in order to optimize your money goals.
- Bring lunch to work, especially if your current habit is to eat out for every meal. Bringing
a lunchto work is not only healthier, it couldliterally save hundreds each month. In fact, I talked to a friend who admitted she spends upwards of $700 a month eating out because she never brings her lunch to work. Packing a lunchis way more economical on your wallet.
- Make your own coffee. American’s spend on average $1,100 a year on coffee. That’s a lot. Invest in a coffee maker and make your coffee at home.
- Curl your own lashes. Okay, ladies (and gentlemen). Eyelash extensions are crazy expensive and require refills every 2 – 3 weeks. I know it takes longer to curl your eyelashes with an eyelash curler, but it’s literally hundreds and hundreds of dollars cheaper to do it yourself than to spend upwards of $100 a month on extensions.
- Do your own mani/
pedis’s: Again, doing it yourself may not be as lavish, but it will save you money and help you reach your goal sooner.
- Workout at home: Gym memberships, pilates classes, and yoga are all pricy. Do your workouts at home. There are plenty of YouTube videos to help with at home workouts in case you feel lost.
- Matinee movies/movies from home: I love watching movies, but prices are rather expensive these days. If there is a movie I really want to see, I catch a matinee showing because it’s literally half the ticket price. Otherwise, I watch movies at home from Netflix since I’m already paying for that.
- Cheaper dates: If you’re in a relationship, switch to more affordable dates. If you like each other, you’ll still have a great time. There’s no need to spend a ton of money each time you go out.