7 Money Management Skills Every Millennial Should Have

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So you’ve graduated from college, you’ve finished trade school, or you’ve entered the real adult workforce. Uh…guess it’s time to figure this whole “money” thing out, huh?

As a young person who’s just starting out in a new career, the concept of money management can be overwhelming enough to bring anybody to tears without a moment’s notice. There’s so much to remember, and so much depends upon financial literacy!

Money management can be tough. Saving can seem impossible. Loans and credit and investing may feel altogether…too much.

But take a deep breath: Instead of looking at money management when you’re young as a burden, try to think of it as an opportunity. You’ll have the chance to make smart moves, to start small, and to save money in ways that’ll seriously benefit your future self.

For 7 of our best tips toward forming solid money management skills that’ll last you well-past your 30s, read on!

1. Learn to Live Within Your Means

One of the most important–and one of the toughest–money habits that every financially stable person needs to make a priority is taking care to live within their own means.

While your parents and your highly-paid friends may have the means to spend lavishly, you’ve got to step back and look at your own finances. Are you spending more than you’re making?

Occasions for using credit cards arise naturally. But it’s important that, unless it’s an investment like a house or a car, you be able to pay your expenditure off in full the following month.

It may be tempting to just “put it on your card,” but when it comes down to it, living within the means of what you’re actually making is far healthier in the long run.

2. Keep Track of Your Expenses

A common mistake many millennials make is spending without monitoring said spending. It’s crucial, especially in the early days of salary and credit-building, to keep track of your expenses.

Most people have set expenses every month: Rent, car payment, insurance, cell phone bill, etc. But what are you spending on top of those necessities?

Keeping a watchful eye on your expenses means you’ll be quick to catch yourself spending unnecessary money. You’ll be able to cut things out and trim back. 

At all times, keep a log of your expenses. You should always know where your money is going.

3. Take Time into Account

Something many of us struggle with is the concept of “Treat yo’self” in relation to the number of opportunities there will be to do so. 

If you’re setting yourself up for long-term financial wellness, it’s important to remember that, although life is short, it’s not that short! Getting coffee before work is okay, but when you do it every day for 40 years…well, it really adds up!

Take into account habitual spending and keep bigger savings goals in mind. With some smart investments, you could seriously increase the value of that coffee money, and spend it on something much more important over time!

4. Look Into Opportunities for Passive Income

Speaking of investments! Many people actually find that, after some time spent on smart investments, their passive income actually serves to replace the income they take from a job.

Although investing money now may require some sacrifice, smart investing can be a huge benefit in the future. You’re committing to future financial security when you take the time to invest smartly.

Talk with a financial advisor in order to find the best opportunities for investment of your money. An advisor can also help you along in many different ways that’ll help your money management and financial literacy skills.

5. Get in the Habit of Saving

This one is simple! Deep down, you already knew it was coming. You should already be in the habit of saving, but if you’re not, know that it’s never too late.

Saving may seem boring. It may seem futile. But, especially if you’ve secured a salaried job, your savings can really add up. Get in the habit of saving, don’t give yourself any shortcuts, and watch your efforts add up!

Many banks allow you to set up an automated deposit each month or each time your direct deposit payments come in. Set a specified amount to save, and watch your healthy saving habits form before your eyes!

6. Don’t Forget Your Credit Score

Ugh. We know–we don’t want to think about it, either.

Credit scores can be stressful and confusing! Like, what does that even mean?? It may seem like the happier route to ignore your credit score altogether and to just hope for the best.

Do your research. Learn how to read and understand the factors that affect your credit score. Down the line, when you’re in need of a loan or purchasing approval, you’ll be glad you dedicated yourself to your score.

Do your research to discover more about your credit score and things like personal loans and financing! Trust us, it’s important.

7. Build a Safety Net

Yeah. We know. “bUiLd A sAfEtY nEt.” Obviously. The fact of it is, we’re not all heirs to trust funds and Martha’s Vineyard Estates. It may suck, but it’s a fact of most of our lives.

It’s easy to advise someone to “build a safety net” when you’ve already got one yourself–and there may be nothing more annoying/frustrating/seemingly-condescending than being on the receiving end of this advice. But with a modest outlook and an understanding that it’s okay to start small, the concept of building a safety net does make sense.

Financial advisors recommend having between 3 and 6 months worth of expenses saved in case of emergency. But if you’re starting from $0 today, that’s great, too. Start with small goals: Save $50 per paycheck each month until you’ve paid off your student loans. After, save $200 per paycheck.

Whatever you can make work is a good and smart investment in your financial future.

Want More Info on Good Money Management Skills?

Money management skills can seem impossible to form at any age–but especially so when you’re young with limited finances and financial resources.

Even if the money management skills you’re working on now seem a little futile or silly, keep up with them. Remember that smart spending and saving becomes a habit as time goes on. Your future bank account will thank you for even the smallest efforts!

For more info on how to achieve good money management and more awesome subjects you can discover, check out our page!