Millennial Money Mastery: Crushing Financial Myths & Building Wealth
Hey There!
This edition of the SalesEra Newsletter is for our fellow millennials as we discuss their financial needs and share tips to reinforce their economic status.
Think financial security is a distant dream for millennials? Think again – we're debunking the myth that has 70 per cent of our generation believing they'll never achieve financial stability, and we're showing you exactly how to turn that narrative around.
Well, adult life can feel overwhelming due to loans, rent, work, and the pressure to enjoy life. Born between the early 1980s and the mid-1990s, millennials face different financial challenges. Many start their careers at lower salaries and not in their preferred jobs, which can leave them in debt.
But fear not, because that would not be the case when you have a solid plan.
Our future finance gurus and savvy spenders, are you ready to turn your financial insecurities into fierce confidence? This SalesEra Spotlight is the go-to guide for income management and wealth protection tailored for millennials’ financial needs.
Rule Your Money: Tips for Millennials’ Financial Needs
Unlike Generation Z, who emphasizes the importance of financial education early in school, millennials often learn about finances through their financial challenges. That's why we advise you to start with this SalesEra article to enhance your financial literacy. Then have a look at the following finance habit-forming tips tailored to millennials’ financial needs. By adopting these practices, you'll discover that handling your finances doesn’t have to feel that difficult.
#1. Create a Budget
A 2024 survey conducted by Forbes Advisor indicated that the leading cause of living paycheck to paycheck for 57 per cent of millennials is inadequate budgeting and financial planning. Therefore, addressing impulse buying is crucial to disrupt this cycle and ensure healthy income management. Budgets are essential tools designed to help individuals achieve their short-term financial goals.
The key to effective budgeting is understanding your essential monthly expenses, which include fixed costs such as rent, utilities, groceries, childcare, and debt repayments. Utilize personal finance resources such as tools, applications, or spreadsheets to monitor your financial situation.
Additionally, make sure to allocate funds for emergency savings for discretionary spending such as leisure activities and eating at restaurants. By determining the total required for all expenses, you can allocate that amount into a separate account at the beginning of each month, enabling you to handle bills efficiently.
The remaining portion of your income can then be deposited into savings, following the budget-to-zero method, which aims to leave you with as little leftover as possible by month's end, ensuring that your finances are managed and targeted toward your desired outcomes.
#2. Grow Your Savings
Millennials are more likely to prioritize experiences over material goods, which can manifest in different spending habits. Based on millennial spending data, the typical savings rate for millennials is 9.8 per cent. If you can boost that figure to 20 per cent, you’ll be able to retire in 25 years or fewer. If you raise it to 50 per cent, retirement could be achievable in 15 years or less. Hence, you must establish an emergency fund for the sake of income management.
Aim to save small amounts weekly, targeting three to six months’ worth of living expenses in a separate, easily accessible savings account. This fund should only be used for genuine financial emergencies and major life events like buying a home, starting a family, car repairs, or job loss.
We recommend storing your emergency fund in a high-yield savings account rather than traditional accounts. This allows your savings to increase while still being easily accessible when necessary. Thus, you will avoid the temptation to spend money, allowing you to gain more control over the specific millennials’ financial needs.
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#3. Invest More
According to a report from Amex Trendex, 29% of respondents from the millennial and Gen-Z categories intend to increase their investments in 2024. Millennials are showing a growing preference for retirement accounts as a way to save and invest, but investing is also for building wealth protection and financial aspirations.
When it comes to long-term investment, each strategy can fit different preferences and comfort levels. For example, dollar-cost averaging allows you to invest a fixed amount regularly, which can help reduce the impact of market fluctuations. Whereas, the buy-and-hold approach encourages you to invest in assets and keep them for the long haul.
In addition, index investing lets you tap into the broader market by buying shares of an index fund. If you like to take a more hands-on approach, consider active investing, where you manage your portfolio to capitalize on market opportunities.
Growth investing focuses on companies expected to grow at an above-average rate, while value investing seeks undervalued stocks that have the potential for significant appreciation. On the other hand, if you’re looking for steady income, income investing might be the right choice, as it centers around investments that provide consistent cash flow, like dividends.
For those who don’t feel comfortable picking individual stocks, there are plenty of long-term investment options that tackle millennials’ financial needs. This can be particularly appealing for millennials, who may have unique financial challenges to navigate. If you’re looking to build a portfolio but aren’t sure where to start, consider using robo-advisors, which can automatically create and manage a diversified investment plan for you.
Alternatively, reaching out to a registered financial advisor can provide personalized guidance tailored to your goals and needs.
#4. Manage Your Debt
Loan debt and housing costs weigh down Millennials. Many people view this generation as having a more complex relationship with debt due to the financial challenges they encounter.
However, an Amex report emphasizes that 42 per cent of millennials are prioritizing debt repayment.
To tackle millennials’ financial needs, they must prioritize short-term financial goals before tackling long-term ones. Thus, they need to adopt debt consolidation loans and repayment strategies like the debt snowball and avalanche methods. They also need to trim expenses to free up for loan payments and to support long-term wealth protection and building.
Mind Your Money: Final Insights for the Millennial Investor
As we close out our newsletter, let’s take a moment to revisit some key tips tailored just for you, our millennial readers! Whether it’s investing or saving up for that dreamy getaway to Bali, we've got you covered with practical insights that won't empty your wallet.
From creating a budget to repaying debt, building an emergency fund, and investing for the future, these steps are all about feeling confident and in charge of millennials’ financial needs!
Here, at SalesEra, we have confidence in your ability to build a successful future. With our expertise in digital marketing and brand management, we can assist you in implementing these tactics in your short-term financial goals and long-term investment. Take the first step toward securing your financial future today and schedule a consultation with our experts to benefit from our services in your next project.