Millennials are way better at managing their finances than their predecessors – this is no longer a matter of opinion, but a fact. When put against baby baby boomers and Gen X-ers, 18- to 33-year-olds are much more likely to stick to their budget and keep track of their expenses; where only 55% of boomers followed a budget, 67% of millennials manage to stick to it. Nonetheless, 33% is still a lot, and if you are a part of this group, you’re going to need some guidance in order to start managing your finances properly. Here are some ideas that will get you on the right track.
1. Track your spending – daily
It’s easy to lose track of your spending, and giving yourself a daily allowance will likely start becoming rather limiting and frustrating (I tried it, it did not work out). The best way to maintain the clearest picture possible with regards to your finances is to use online tools that sync up with your accounts (checking and credit card). These tools allow you to track how much you spend according to categories, in order to give yourself a clearer picture of what expenses need to be cut.
2. Don’t get stuck with micromanagement
Look, I have to say that micromanaging is actually awesome; at least it would be, if it was sustainable. What does this mean? Well, I believe that things can be micromanaged only up to a certain point: up to a point of frustration and breaking. This point is dangerous for a particular reason: once you’ve dealt with too many details, you start craving a break – a break that will inevitably lead you to spending sprees. This is exactly why micromanagement is bad for your finances.
Instead of dwelling on details until you get sick and tired of it, know where you put your money and allow automation (payments, spending alerts) to handle everything for you. Even being filthy rich means nothing if you don’t have a peace of mind.
3. Always be learning
The thing is, the best way to train yourself to handle your finances properly is by looking at it as a business; and what do businesses do in order to make sure that the personnel that handles their finances is top-notch? Training and education!
This is exactly what you should do, and the internet is a fantastic tool here – you can learn virtually anything nowadays, as long as Google is by your side. In order to avoid spending vast amounts of time, endlessly searching for new information, focus on particular topics that will help you learn the ropes of clever budgeting; buzzwords such as credit and investing offer swarms of information behind them.
4. Saving a little bit at a time
Having dreams is awesome – they allow you to maintain focus; to keep your eyes on the prize. Having a plan-less dream, however, is utterly useless, because, unless you are really lucky, chances are that it won’t happen, unless you think things true and stick to it.
Of course, here’s the biggest problem with saving – start setting aside too much, and your spending budget will suffer a huge blow, leading to unsatisfactory results. This is why you need to plan your savings – think about your dream – how much money do you need? Take that sum and get calculating until you’ve reached a perfect time-savings balance. Living from paycheck to paycheck is never a good idea (tried this, too).
5. Earn money on the side
Working two jobs used to be really difficult – nobody did it unless they really, really had to. With the ever-growing popularity of the world of internet, there are now countless opportunities to make money online, and this is something that will definitely reflect positively on your budget.
So, what’s the difference between now and back in the day – well professions such as content writing, web design, etc. are really convenient and perfectly tweakable to suit your exact time and budgetary needs.
6. Get rid of the clutter in a proper way
First of all, hoarding things is a terrible idea, psychologically, physically and aesthetically. Second of all, if you declutter things properly – by selling stuff that you don’t use, you can boost your budget tremendously.
But first, start by putting a mental label on the stuff you are emotionally attached to; I’m talking about the things that you’re genuinely, emotionally attached to. Everything else, you can put on eBay, or make it a part of your yard sale!
These six money management tips will hopefully help you become a part of the 67% of millennials that are doing an awesome job with their finances. Keep a close eye on your spending, don’t micromanage, be in a constant state of research and learning, save a little bit at a time, find an online job to suit your needs and sell the stuff that you aren’t attached to.