If you are a member of Generation Z, here are some money tips from Millennials and Gen X that we have learned the hard way. Yes, you are still young and have the rest of your financial lives ahead of you, but learn from our mistakes and avoid the hardship we experienced firsthand. And as always, if you need any financial assistance seek out the help of a Registered Financial Consultant.
While Gen X grew up in a booming time, many of us left college or were starting our careers in earnest in the 1990s, and then we had the Internet Bubble, and the economy went south. Fast forward about ten years, and Millennials were graduating and entering a job market that did not want them in the Great Recession. Both were some seriously negative economic times no matter what generation you are from, but like those before us we got through them and even learned some things along the way.
Do Not Live Beyond Your Means
Yes, this is a no brainer, but one tip that is extremely easy to say but much more difficult to do. It seems that college costs are going up three times as much as anything else, healthcare is increasing, and housing has fully recovered from the prices a decade ago, and Gen Z faces all of these issues the same as everyone else. But do not worry, latter tips will assist you in maintaining a healthy balance in your financial world and will enable you to achieve this tip and live well within your means and not worry about your financial future.
A key here is to avoid debt and invest early and often in yourself. And by investing in yourself, that could be by saving money, obtaining an education that does not cause you to incur debt to get a better job, or buy a reasonably priced house with a sufficient down payment. But no matter how you invest in yourself do it in a manner that allows you to achieve your goals all while living within your means.
Budget and Stick With It
Budgeting is vital, and a real key to achieving tip number one and that is to live within your means. If you are not budgeting, you have no real idea where your money goes regularly. This does not have to always be a time-consuming endeavor but does take some thought and does consume some of your time. But it is indeed time well spent if you can achieve this goal, which will lead to all the other goals being achieved easier as well.
I budget and use an Excel spreadsheet from Simple Planning that works incredibly well and is extremely detailed, as well. It has plenty of categories to use and incorporates in charts and graphs as well to show you how you are doing when you compare your budget to actual expenses. If you are interested in obtaining this budget spreadsheet and many other useful spreadsheets visit http://bit.ly/2q7dbjS. And if you are like many who listen to or read Dave Ramsey you can get some useful cash budget envelopes at http://bit.ly/BudgetEnvelopes. Or get both and get a handle on your monthly budget.
Have an Emergency Fund
If you are living within your means and are budgeting, this is a vital step in your financial well-being. And it is extremely important that everyone have an adequately funded emergency fund. Let us face the hard truth, and that does not matter what there will always be an emergency in your life at some point.
So, what is an adequately funded emergency fund? Well, that depends on the individual and their unique circumstances. People who have steady and reliable employment and little debt may not need as much as someone who lives off the Gig Economy. But I would say, also like Dave Ramsey, start with at least a $1,000. Then after you have done that, save up between three- and six months’ worth of expenses. Here the more, the better because you never know what may or may not happen to you. And if you do have an emergency as soon as it is over start replenishing your emergency fund as not to be underfunded when the next one occurs.
Resist Lifestyle Creep
Here the concept is simple enough. If you get a raise, do not increase your spending and remain within your budget and again, living within your means. Now I am not saying to not enjoy some of your hard-earned gains but always pay yourself first and get to the point where you are maxing out your 401(k) and IRA accounts. And if that means saving half of your raise to achieve these goals then that is what I am recommending. Always pay yourself first and if you get that raise resist switching to a higher lifestyle. You will not regret this when you are later in your career and especially in your well-deserved retirement.
Payoff Your Debts
This one seems to be easy but like living within your means it can be more difficult than it appears. It is always the best thing to do when that debt is high-interest credit card debt, so pay that off monthly to avoid having that high compounding interest work against you and your financial needs. And if you are hit by hard times for a period always pay more than the minimum payment on credit card debt to avoid some of the interest charges. And then pay off the amount in full as soon as possible. But paying off the balance in full will be easier if you are living within your means and maintaining a proper budget system. That way you will always have the funds to be credit card debt-free.
And pay extra on other debts as well, like car payments and your mortgage. By paying extra principal on these debts you are saving on interest charges as you will pay the debt off faster.
Well, here are five simple tips from the two generations that preceded Gen Z. If you have any questions or need any assistance, reach out to a Registered Financial Consultant. And as always, if you have any questions please feel free to contact me directly.
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