Whether it’s from crushing student loan debt or the inability to find a high-paying job or the lack of financial literacy, one thing’s for sure, millennials often struggle on the personal finance front. Freedom Financial has several financial tips to help broke millennials get better with money, regardless of income level, employment status or level of debt.
Review your finances often.
The only way to get better with your money is to actually pay attention to what’s happening with it – even if it pains you. You’ll learn a lot about your own financial habits and spot ways to improve your financial life just by reviewing your income, expenses, and debt on a regular basis, advises Freedom Financial.
Look for ways to reduce your spending.
Let’s be honest, you don’t really want to cut back on your spending. Except for all the bills, spending money can be fun. However, spending too much money on entertainment and leisure is one of the things that leads to money troubles. Consider your own spending habits and look for ways you can cut back so you have more money to save or put towards your debt.
Don’t pay checking account fees.
There are far too many free checking accounts to ever pay a fee. Some checking accounts require you to meet certain requirements to have the monthly fee waived, warns Freedom Financial, but the requirements are often pretty easy. For example, you may only have to have a direct deposit or maintain a certain minimum balance to get a free checking account.
Start building credit.
Even if you’re not applying for a credit card or loan, you’ll need a credit score for many other transactions, like establishing cell phone service in your own name. Freedom Financial suggests a credit card is one of the easiest ways to start building credit, but it’s not the only way. Credit builder loans are also an option for jumpstarting your credit.
Know how to pick the right credit card.
When you decide you’re ready for a credit card, make sure you choose a good one. Ideally, your credit card should have no annual fee and a low interest rate. A credit card that pays rewards is also a good perk. And, if you want to build your credit, make sure the card you choose reports to at least one of the three major credit bureaus.
Contribute to your retirement.
At this point, you’re probably thinking that retirement is a long way a way. That’s exactly why you should be saving for it. You have decades to put away a small amount of cash each month and let it accumulate interest. Freedom Financial suggests starting now so your money has more time to grow and you’ll have more when you retire. Waiting until later means you’ll have to contribute more money each month to reach your retirement savings goal.
Pay quarterly taxes if you’re side hustling.
When you’re making money as a freelancer or contractor, you’re actually self-employed, even if you only do it part-time. That means you’re responsible for paying quarterly taxes on your side income. Paying these taxes throughout the year keeps you from having a hefty tax bill when it’s time to file income taxes.
Broke millennials don’t have to stay broke forever. By taking charge of your finances and really focusing on improving your money habits, you can turn your finances around completely.