Top Money Tips for Millennials
Let’s face the facts. Sometimes schools don’t do the best on preparing millennials on managing their money and figuring out finances. Once you graduate college and enter the real world, you are bombarded with student loan debt, bills, and everyday expenses. Don’t panic. No need to rummage through the pizza grease and beer stained sofa cushions for spare change. Here are the top banking tips, from the experts, so you can stay on top of your finances and sweep your worries under the rug.
Use Online Banking Apps: Most financial institutes and credit unions have a free downloadable online banking app. Don’t wait - Get it NOW! This will allow you to monitor your accounts, transfer money, deposit checks, (sometimes as easy as taking a photo of your check), and pay off your bills. Be pro-active; this is an easy first step to take.
There are other downloadable money and budgeting apps for iPhones and Androids that can help you save, budget for upcoming expenses, and avoid fines from overdraft fees. One of the best financial management tools out there is Collins Community Credit Union’s Money Meter. Money Meter allows you to quickly view all your banking, investment, mortgage and credit card accounts in one place, regardless of the financial institution, and the best part, it's free!
Build Your Credit: For some of you, your credit score may only consist of your student loan. Guess what? It’s time to start building that credit. Do you have a credit card? They can help; just as long as you stay on track and pay your monthly bills on time. Another way to build credit is by becoming an authorized user on someone else’s account. Do you know someone who is great at financially handling their credit card? If the answer is yes, you can ask to become an authorized user on their account, which means you receive your own credit card that shares the cardholder’s credit limit. Just remember, as long as the person you know is paying their bills sensibly, and on time, your score could benefit and improve. You can even cut up the credit card you were given to avoid spending money on their account.
When you build a credit score, you are showing how responsible you are, which can help you later when you want to buy a car, rent an apartment, or get approved for a mortgage. The better your score, the lower the interest rate you may be eligible for when applying for your next loan.
Create an Emergency Fund: Sometimes life throws us a curveball. Make sure you’re prepared for the pitch. You may get in a car accident, lose your job, and have health expenses. Any of these things can happen on a dime, no matter how unfortunate they may be. Emergencies happen. Have a backup plan with an emergency fund. A good rule of thumb, save enough to pay four to five months of living expenses. Other steps to take to start an emergency fund include saving your change. Whenever you break a $20, keep the $1 and $5 bills and keep them in a jar at home. Once the jar is full, move the money into your saving account. You can also try cutting back on costs. Carpool with a friend or coworker, cook meals at home and avoid buying that cup of coffee on your way to work. Put the leftover money into your emergency fund.
Have a Long-Term Savings Plan: When you get your first job out of school, ask your employer if they offer a 401(k) plan. If so, get in it right away. If the company matches it, it can mean free money, in addition to the money saved by you. The most common 401(k) match is 50 cents for each dollar saved, up to six percent of pay. In many cases your take home pay isn’t drastically affected by a 401(k) since the money you are saving is taken out before taxes. Plus, you’ll be reaping the benefits of working for an employer who invests in you by also chipping into your retirement on your behalf.
So, how much can you contribute? According to CNN Money, if you are under 50 years old, you can contribute a maximum of $18,000. If you're 50 or older, you can make an additional catch-up contribution of as much as $6,000, for a total of up to $24,000. Some jobs allow you to sign up for a 401(k) plan as soon as you start. Others enforce a waiting period of a few months to a year before you can contribute.
Sign Up for Email and Text Alerts: Isn’t technology a great thing? Today, you can get up-to-date info, on the go, right to your phone. You can request to receive automatic alerts when your balance falls below a certain level, or to confirm when certain types of transactions occur. You can be alerted when you receive an overdraft, when credit card payments are due, or a reminder when other bills must be paid. This way, you will always be in the know.
Get Connected on Social Media: Today, every Millennial is on social media. In fact, did you know almost 75% of all internet users and 40% of cell phone customers use social media? It is an essential part of our culture. From Facebook to Twitter, to Instagram, follow your financial provider’s platform to learn about deals and promotions. Stay in the news on latest products and services they offer, which in the long run could save you money. #saving
At this point in your life, time is on your side. Use it to your advantage. Start saving today by following these need-to-know tips. The future is filled with unlimited possibilities. Be financially ready to live the life you dream of.