Millennials are known for their excessive spending and having no savings. They live in the now because #YOLO, and they consider tomorrow as just another day that'll take care of itself. But behind that carefree facade is still some worry about the future, like where to go, what to do, and how to be richer. To help you figure things out, here are money habits you've got to develop now:
1. Tracking your expenses.
It's the most basic way to control your finances because you'll know for sure how much money you're putting out monthly and if you're really a big spender to a fault. And when that high amount surprises you, you know you have to do something to keep it down. What more, you'll know things you can stop spending on (goodbye, sosyal coffee) and actually set a limit on how much you can spend. If you go beyond that, then you compensate or adjust in the following month.
To set that monthly limit, find out how much of your earnings you want to save: 60 or 70 percent? (Ideally it's more than half of what you're making.)
Having a budget for your food, transportation, and other expenses can help you stick to your monthly limit by really getting into the specifics. This can also help you realize what you should be prioritizing, that you probably shouldn't be skipping meals so you can shop 'til you drop.
3. Planning your spendings.
For sure there's bound to be a month or two when you'll exceed your monthly limit because you're having a vacation. Wise money habit? Save up for your trip so you won't spend a lot more than you would otherwise. Always anticipate a big splurge.
4. Have an emergency fund.
It's important to think in the long-term. This fund is in case of emergencies like losing your job (hey, it can happen!). Financial experts advise saving enough to cover three to six months of your expenses you really, really can't live without (rent, electricity, water, food).
5. Paying your credit card debts.
If you're in debt, you most likely won't be able to buy yourself a home in the future or have a relatively carefree way to retirement (yes, you have to think that far).
6. Make sacrifices.
This is what all money-saving tips boil down to. The reality is that when your money is limited, you really won't be able to do every single thing you want to do. And that's why you're saving: so that one day you would've saved enough for all of it, that you'd be financially strong too.
7. Learn more about money and good money habits.
If you want to make your buck bigger or you're interested in taking risks for investments, learn the game from the pros. Khan Academy, a non-profit educational organization that provides free education to anyone, created Bettermoneyhabits.com. It's for finance-related education that's suitable for people of all ages to learn more about good money habits. You might want to start checking that out.
There seems to be a lot of legwork in all this, but that's how it's like breaking a habit. Remember you have the rest of your life ahead of you, so start making that future great.
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