As a self-employed millennial, you need to know your worth and understand what you are capable of doing for others. You’ll likely be juggling multiple duties and responsibilities with your business, so make sure you know how to do them all.
There are a few things that will help you get started: -Calculate your monthly expenses -Try to save 10 percent -Calculate how much money you need in order to reach your financial goals -Figure out what percentage of your income is going towards each goal -Track your progress every month and make adjustments accordingly -Take the time to celebrate when it’s going well!
2. Get a Job
If you are not self-employed, find a job that pays well enough to sustain your lifestyle. The cost of living has risen dramatically in the last few decades, as have wages. When it comes to financial planning for millennials, one of the most important pieces is finding a job that pays well enough to sustain your lifestyle.
This means that you will not be burdened with managing your own finances on top of working full-time hours. If you are looking for work, make sure to research good employers who offer competitive salaries and benefits before accepting an offer.
3. Don’t Overspend
It’s easy to find a way to spend money in your everyday life. And the younger you are, the more likely you are to overextend yourself financially. Millennials may be desperate for financial independence and success, but they often find themselves living paycheck-to-paycheck instead of saving and planning ahead.
The key is not living on impulse. Think about your goals before you open your wallet and make a purchase. If it’s something that will help you achieve those goals, then go for it. But if it’s something that feels like more of a want than a need, take a step back before investing in it.
4. Save for Retirement
One of the biggest financial challenges facing young adults these days is saving for retirement. As millennials struggle to find jobs with good salaries, many are opting to start their own businesses or freelance.
This requires them to allocate their time and energy towards their careers; however, they often neglect saving for retirement. It’s important that millennials understand that they need to invest in themselves now, so they can have more options later.
To help your finances stand on solid ground, consider contributing a percentage of your income into a Roth IRA each year. A Roth IRA allows you to contribute up to $5,500 per year ($6,500 if you’re over 50) without any taxes being taken out at the end of the year.
5. Avoid debt
For many millennials, finances are the number one stress in their lives. One of the best ways to reduce this stress is to avoid debt.
This means not taking out loans and not overspending on credit cards. It also means being honest about your income so you can estimate how much you can afford to spend in a month and stick to that budget.
6. Start an emergency fund
It’s difficult to get ahead when you’re spending every penny you make. And that’s why it’s important to put money aside for emergencies. This can include unexpected expenses, such as car repairs or a medical emergency.
Start by setting aside at least three months of expenses in a savings account. Even if you don’t have the option of working for one month, imagine how much stress and anxiety would be lifted off your shoulders if there was enough cash to cover the bills for six months at least.
Another way to start an emergency fund is through side hustles. Not all side hustles are created equal, so it can be easier said than done. The best way to start out is by finding something that doesn’t require a lot of time commitment on your part.
If you’re interested in this tactic, look into freelance writing jobs on UpWork or Fiverr.
7. Invest your money
It’s easy to think that millennials should invest their money in stocks, which is a great way to make money. But the downside of investing your money in the stock market is the risk involved.
It’s a good idea to do your research and determine how much risk you want to take on for your investments. Keep in mind that you might not feel financially stable enough for this type of investment right now, but it could be worth it down the line.
8. Don’t spend more than you earn
As a self-employed millennial, your income can fluctuate. But that doesn’t mean you should spend more than you earn. This is the single most important financial tip for young adults to remember.
You must maintain some level of savings in order to be able to handle any costs related to unforeseen circumstances, such as an emergency or a car repair.
The Bottom Line
It may seem like millennials are struggling more than other generations. However, the truth is that many young adults are actually doing better than older generations. They have more opportunities and options, but they also need to be proactive in their financial planning.
One of the biggest challenges facing millennials is managing their finances while they’re still establishing themselves professionally. When the cost of living keeps going up without any additional income, it can be hard to stay on track with your finances.
But if you’re able to plan ahead for these moments of financial stress, you’ll be able to maintain a healthy budget and reduce debt. So what can you do to manage your finances?
Here are some tips for keeping your spending in check:
#1 Track Your Spending: Set up a system for tracking where your money goes so you know how much you have left over to save or spend at the end of each month or week.
#2 Keep Up With Bills: Some bills come due every month or even every week depending on the type of bill it is. Try making those payments on time so you don’t incur late fees when they start piling up and make a dent in your savings account.
#3 Pay Yourself First: Make sure that at least 10-15% of your take-home pay is put into savings regularly so that savings never get too low and cause strain on other parts of your budget.