If you’re in the millennial generation, you’re likely in the phase of your life where you’ve established a career for yourself and are beginning to think about the next steps in your life from getting a mortgage and buying a house to investing in a retirement fund.
No matter what your next financial goal or milestone will be, we’ve compiled a list of four financial tips for millennials.
Build an Emergency Fund
One important financial tip is to build an emergency fund as early in your life as you can. It’s estimated that only 19 percent of millennials have enough money saved up to cover six months of emergency expenses compared to 30 percent of baby boomers and 29 percent of those in Gen X.
As a millennial, aiming to save up for three to twelve months of expenses can be a good starting point. This money should be in its own account, separate from your regular savings account. Continue to let this money grow in case of an emergency, and withdraw it if and when you absolutely need it such as during a period of unemployment or when you incur unexpected medical expenses.
Work to Pay Off Debt ASAP
Whether you have outstanding debt from education, credit cards, or another source, aim to pay off debt as soon as you can and try to avoid taking on more debt while you pay outstanding debts off.
All of your debt doesn’t have to be paid off at once, but making monthly contributions towards paying off your debt can help improve your long-term financial outlook.
Once your debt is paid off, it can be easier to afford things you want at this point in your life such as a house with a mortgage payment or a new car and auto loan – both of which come with their own financial obligations.
Establish and Contribute to a Retirement Savings Account
There are multiple types of retirement savings accounts to choose from that you can contribute to that will help you save up for retirement. The sooner you start contributing even a small amount of money to a retirement account, the more time it has to grow and accumulate interest before you retire and need access to those funds. Millennials are in the perfect age range to begin investing in a retirement savings account.
Camino Federal Credit Union offers individual retirement accounts (IRAs) that can help you save for retirement .
Make A Budget and Stick to It
Creating a budget that outlines your income versus expenses on a weekly or monthly basis can help ensure that you aren’t spending more than you can afford to. Sticking to the budget you create can help keep you on track to save up for items you want to purchase in the future while avoiding accumulating debt.
Depending on your specific financial goals there may be more financial tips you choose to implement and help guide you through your financial journey as a millennial.
Do you need help managing your finances? Let us know!
It can be challenging to balance your savings, loans, and other accounts all in one place. However, we offer many ways to manage your finances at Camino Federal Credit Union through our branch location, online banking, and mobile banking app. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us online at caminofcu.org for more information.