Pay off your student loans
If any one understands the stress of student loans it’s the millennials. Not only has the value of education skyrocketed over the years, the fact is that finding a decent job in your field right after graduating has become ever so inconvenient. There was a time when people could easily move out of their parent’s home after getting a job but such is simply not realistic by today’s standards. Seriously, what is the point of moving out right away if you can barely support your living and have a debt cloud over yourself. Don’t forget about the huge list of additional bills you will inherit like rent/mortgage (another loan…), utilities, etc.
It is best you get comfortable and appreciate your parents allowing you to stay under their roof . Spend this time earning money and paying towards your student loans. The key is to pay more than what you are required to. By paying more than your monthly payments, you are putting additional money towards the principle, thus reducing the length of payment term and reducing the amount you would spend on interest. Life of leisure will come sooner if you do all you can to prioritize paying off your debt first.
Find a back account that doesn’t have tons of fees and one you can grow with
When it comes to understanding banking, the millennials are some of the most out of touch off all the consumers. Most of us have accounts various accounts (i.e checking and savings) but what many do not realize is that there can be fees attached to your accounts. Fees for ATM transactions, low balance fees (yes, certain banks take money out of your accounts if you have a low balance – having multiple direct deposit is a request certain banks ask to waive this fee so look into it!), annual fees, and much more could be impacting you.
It is advised you look for accounts where you don’t suffer from these consequences; having an account with no international fees feature is highly encouraged. This may mean finding a bank outside of your local vicinity but it surely beats paying money for no reason.
Maximizing 401K Matching, don’t sleep on that!
Most employers have some form of retirement plan (like 401(k)) set up and the best way to utilize this privilege is by using it to its maximum potential. The idea is to contribute the peak limit accepted – annual limit for 2015 is set $18,000; especially great if your employer offers high percentages. For example, if you make $50K a year and put $1,500 in your 401(k) annually while your company matches you up to 6% of the annual salary, your employer will only give you $1,500. But, if you were to give $3,000 (or more), your employer will give you a total of $3000.
Build your credit and constantly monitor it
Importance of a good credit score cannot be stressed enough. From getting approved to rent homes to being applicable for mortgages, car loans, etc., you simply need to have a good credit score. Building credit is not difficult at all; all you have to do is use your credit card within the 1/3 of the limit (credit utilization) and pay it off in time – it can even be as easy as making a small $10 purchase per month and immediately paying it off through your mobile app when you get to the car. You however do not want to go overboard with making too many credit cards in hopes of accelerating the process; in fact opening more credit lines in short durations of time can have a significant negative impact on your credit score.
The average credit score for people up to the age of 55 is below 650 in United States; we highly encourage you to not be a part of this statistic.
Prepare for the worst and hope for the best
As much as we believe in living in the moment, we have to stress the importance for preparing for the future. It is saddening to know that a good majority of the Americans simply do not have enough savings to deal with emergencies – let alone for kid’s education, retirement, etc.
Young earners must realize that the trick to comfortable life is to pay the bills, save, and then go spend on things; unfortunately, many prefer the reverse strategy for their daily operations – and of course skipping the “save” step. Life is not going to stop throwing curveballs at you but there is enough information at your disposal to make sure it won’t completely throw your game off.