[ad_1]
It seems like it was just yesterday when 2023 was upon us — and now 2024 is just around the corner. While the passage of time can be bittersweet or even upsetting, millennials should fear not — for with age comes wisdom, and in the new year it is possible to make good or better financial choices.
I’m a Financial Advisor: Here’s the No. 1 Piece of Advice I Would Give My Younger Self
Know: 3 Things You Must Do When Your Savings Reach $50,000
Millennials — those between the ages of 27 and 42 at the start of the new year — have different financial goals and concerns than those in other generations. So, GOBankingRates tapped some money management experts to get their advice on the best money resolutions millennials can make in 2024. Here are the top 10 responses.
10. Build an Emergency Fund
After living through a global recession and pandemic, this might seem like second nature for millennials. But more often than not when it comes to funds for tough times, millennials tend to run on empty.
“Focus on building or replenishing an emergency fund to cover 3-6 months’ worth of living expenses, providing financial security in case of unexpected events,” advised Joseph Catanzaro, a financial advisor at Oak & Stone Capital Advisors.
“Creating and maintaining an emergency fund that covers at least 3-6 months of living expenses is fundamental,” echoed Sean Lovison, founder and lead planner at Purpose Built Financial Services, LLC. “It safeguards against unexpected life events and emergencies, of which there will be many.”
9. Attack Student Loan Debt
Many hoped 2023 was going to be the year that a significant portion of their student debt was forgiven, but that dream for most millennials did not come true. So what’s next? Smartly charting the ways to pay back outstanding balances on student loans.
“Create a plan to efficiently pay off student loans, exploring options such as refinancing, income-driven repayment plans, or seeking employer assistance programs,” Catanzaro said.
I Grew Up Poor: Here Are 8 Things I Never Waste Money On
8. Invest in Financial Education
Just because you graduated from high school over a decade ago or didn’t quite finish that semester in college does not mean it’s too late to learn something new. Developing a new skill or gaining knowledge can lead to more opportunities in a current or future career.
“Invest time in learning about investment strategies, asset allocation, and long-term financial planning to make informed decisions about building wealth over time,” Catanzaro advised.
7. Plan for Homeownership
If you mention buying a home to a millennial you may be surprised to find that they are not factoring that into their life any time soon, if ever. The good news is that with the right strategy and foresight, there are many ways to save for, finance, and purchase a home.
“Assess the feasibility of homeownership, considering factors such as saving for a down payment, understanding mortgage options, and evaluating the long-term financial commitment,” said Catanzaro.
6. Upskill and Advance Your Career
Investing in yourself will always provide the highest ROI (return on investment), according to Lovison.
“Skills and career advancement can provide a pathway to higher income and a means to secure financial stability,” said Lovison. “Continuous learning and upskilling can lead to better job opportunities and increased earning potential.”
Catanzaro seconded that notion, suggesting that millennials “[invest in skills development and career advancement opportunities to enhance earning potential and job security in a rapidly changing job market.”
5. Give Your Retirement Savings a Boost
Unlike baby boomers or Gen Xers, retirement might feel like a long way away for millennials. That doesn’t mean it isn’t time to start saving for retirement with a regular contribution to some accounts and maybe a little bump up in the number of dollars along the way.
“The sooner you start saving for retirement, the better,” Lovinson encouraged. “Early contributions benefit from the power of compound interest, building a substantial nest egg over time, which is critical for a secure financial future. Use target date funds if you are nervous about getting started, but get started!”
Catanzaro advised, “Increase contributions to retirement accounts, taking advantage of employer-sponsored plans, and consider additional investment vehicles like IRAs to maximize long-term savings.”
When it comes to adding a little boost, you can also follow the next piece of advice…
4. Leverage Employer Retirement Plans
So many workplaces are offering retirement incentives, contributions and more, but if you’re a millennial who isn’t taking advantage of these benefits, your future self will be missing out.
“Never miss the match,” Lovinson said. “Maximizing contributions to employer-sponsored retirement plans, especially those with matching contributions, is a straightforward strategy for boosting retirement savings.”
Lovinson sums it up by saying, “It’s free money.” Millennial or not, who doesn’t love some free money?
3. Develop a Debt Repayment Strategy
Credit card bills. Car payments. The red can add up faster than the black sometimes for millennials, but having a plan in place to pay off debt on time and in a manageable fashion will be the key to success in 2024 and beyond.
“With the prime interest rate increasing by 5% in the last two years, credit card rates have also increased by at least 5%,” highlighted Stacy Dervin of Tailored Financial Planning. “Try sorting your balances by highest interest rate to lowest and begin paying off the highest-rate balances first.”
Lovison noted, “Effective debt management — balancing the reduction of high-interest debts with investment and savings strategies — is crucial. This includes exploring options like refinancing to lower interest rates and consolidating debts. And whatever you do, stay away from credit cards unless you can handle the responsibility.”
2. Do a Financial Wellness Checkup
Doing a comprehensive financial wellness checkup — such as reviewing your budget, going over insurance coverage and strategizing for long-term financial goals — is key, according to Catanzaro.
“There is no better time than the start of a new year to reevaluate your goals and priorities. Most people wish to save for retirement, but there may be other, more personal goals worth addressing in your finances as well,” said Rachael Levine, a partner and senior financial advisor at Peltoma Capital Partners.
1. Stop Speculating and Start Investing
Many people don’t know the difference between the two, according to Levine, who encouraged millennials to do their homework on ways to make their money grow.
“Ultimately, you should be finding ways to reduce uncertainty around investment outcomes in order to reach your goals,” Levine said. “Seeking out low cost, globally diversified investments rather than picking individual stocks can help increase your odds of success.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 10 Best Money Resolutions for Millennials, According To Experts
[ad_2]
Source link
