6 Personal Finance Tips For Millennials

Most first-time workers accumulate stuff, dine out, and spend a lot to keep appearances. They want the latest gadgets and that trip of a lifetime to the Caribbean. They work hard to sustain their comfortable lifestyle. When you’re in your 20's, there’s no urgency to think about retirement. The deadline is decades away, so why worry now? Wrong.

Financial advisor and book author Henry K. Hebeler once said: “Growing old is not an option. We don’t have a choice. But we do have choices that will greatly affect our quality of life for the rest of our life.” If you backtrack several years, you’d remember that you can lose a high-paying job overnight. How many Wall Street executives were thrown into the streets in the last financial crisis? How many retirees were forced to re-enter the labor market to pay for their mortgage?

Procrastinating on your financial budgeting and retirement planning is a mistake you cannot afford. The earlier you get your finances on track, start saving and investing, and making better choices, the better. Here are six things you should consider in money budgeting.

Create a roadmap

You have to know where you want to go before mapping out plans on how to get there. When do you plan to retire and how much would you need during your retirement years? The earlier you start saving and investing for your old age, the greater the opportunities for you to hit your target. A financial advisor can help you project, based on economic indicators, on how much you’d need to set aside and where to place your money to hit your retirement fund goal. You can explore time deposits, government notes or mutual funds. You can also do your own research. There are free financial calculators available online.

Do it the Rockefeller way

John Rockefeller, founder of Standard Oil and one of the builders of America, kept a small notebook with him where he jotted down his daily expenses—his bills, meals, and other sundry expenses. He kept this habit until the day he died.

Do you have a clear idea on how much of your employee salary goes to your daily trips to the coffee shop for an overpriced beverage? You may be surprised. Make it a habit to list down your monthly, weekly and even daily expenses. You can either do it with notebook or a budgeting app. Track down where your money goes and make adjustments as necessary.

Buying or renting: what’s best for first-time workers?

There’s been a lot of publicity about millennials opting to rent homes instead of buying their own. In a recent Bloomberg article, the U.S. renting market is at its most profitable period since the 1960s, thanks to the millennials preferring to pay rent than mortgages. The term “Landlord Nation” is gaining popularity in the U.S. and Canada. Redfin CEO Glenn Kelman said: “The haves in our society are renting homes out to have-nots, and they’ve been able to do that at increasingly high rents.”

There are a lot of ways to save money when renting. You don’t need to worry about maintenance costs, property taxes, and dues imposed on property owners. If you can afford it, consider condominium renting where you get 24/7 security services and free access to lifestyle amenities not available in other housing accommodation. Millennials living in resort-type condominium projects enjoy security and maintenance services, access to a fully-equipped gym, leisure pools, and common areas. No need to install outdoor surveillance cameras, get gym memberships or have weekend out-of-town trips. Everything is provided for in a condo project.

Renting saving tips: cut commute time, get a second job

If you’re renting in a condo or apartment near your office, you can save time and money commuting, allowing you to find other sources of income. It’s likely that a large portion of first time employees’ salary goes to student loan repayments and other debts. The vicious cycle of loan payments every payday can get exhausting and frustrating especially when it’s affecting the quality of your life.

You can explore the gig economy which includes freelance writing jobs, website development, and other consultancy work. You can browse freelancer.com, upwork.com or TaskRabbit. Holding a second or even a third job can help you stay afloat while paying off your debts.

Renting tips: eat at home

How many times do you dine out? Daily? Weekly? Eating out is not only bad for your health, it can be disastrous to your budgeting. Stock up on canned goods such as tuna and fresh vegetables for instant sandwiches and salad. You can prepare spaghetti sauces, store them in the fridge and reheat in your microwave for dinner. Have fresh fruits and crackers in your bag. These are healthy options as office snacks instead of overly sweetened donuts.

Strategize your leisure activities

Saving up doesn’t mean you’d have to live like a hermit. However, you may need to lessen the weekly bar hopping and monthly shopping spree. 

Personal finance is not rocket science. We’re fortunate to live in the Internet Age where information is freely available right at our fingertips. You can learn the basics of retirement planning, search for a helpful renting guide for first time workers, and even start investing in offshore funds. Stop putting off your financial planning. Remember: the clock is ticking.