7 Habits Millennials Should Adopt
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Millennials have been accused of everything from destroying the economy to being glued to their screens to being lazy and in debt. They are, without a doubt, the most talked about and contentious of all the generations.
Many sectors have declined, and income growth has been sluggish throughout the Millennial age. However, the causes for these problems are significantly more complicated than the Millennial caricature suggests.
As a result, what is the reality of Millennials? Are Millennials just lazy debt-holders who want a handout, or are they a generation that can’t keep up with rising costs, stagnant wages, and growing student debt?
This year, we’ll talk about significant Millennial spending patterns and income figures that you should be aware of.
What exactly are Millennials?
Millennials, also known as Generation Y or Gen Y, are the generation born after Generation X and before Generation Z. They are the most recent generation to be born.
The generation is commonly described as individuals born between 1981 and 1996, while those born in the early 2000s may also be considered part of the generation.
Millennials are often the offspring of Baby Boomers and the early Generation Xers, and they are the largest generation in the world.
As the first generation to grow up in the age of the Internet and technological advancements that have resulted in the widespread usage of cell phones and social media, they have been referred to as “digital natives.”
Unfortunately, since reaching maturity and beginning their working life, the Millennial generation has been subjected to severe economic turmoil.
With the Great Recession and the disruption created by the Covid-19 outbreak, as well as stagnating income growth, increasing inflation, and massive school debt, Millennials’ capacity to accumulate money and reach the same milestones as previous generations have been severely hampered.
7 Habits Millennials Should Adopt
Join a 401(k) or increase your contribution
For those of you who haven’t started contributing to a retirement account yet, this is the single most essential thing you can do for your financial well-being.
Because of the power of compound interest, it is critical to begin saving immediately, whether it is with a 2 percent monthly commitment, a 6 % contribution, or a 10 % contribution.
If your company matches your contribution, that’s a bonus, and you should make enough of a contribution to receive the entire employer match, if possible. However, you must make contributions to a retirement account in order to be eligible for benefits.
If you currently make contributions to a 401(k), you might want to consider increasing your contribution amount by one percentage point to compensate for inflation.
When you do it at the same time as receiving an increase in salary, you’re unlikely to notice any difference. The Internal Revenue Service announced greater retirement plan contribution limits for 2019 (up to $19,000).
Even if you are unable to reach the $19,000 goal, why not use this as a reminder of the necessity of increasing your annual contribution? So why not take advantage of the situation?
No-spend days once a week or month
The use of a ‘no spend day‘ is recommended by many financial experts as a way of encouraging you to be more frugal with your spending.
Begin with once-a-month visits. It’s very self-explanatory — simply refrain from spending any money on that particular day. It is less about cutting spending in general and more about getting you to consider where your money is being spent.
Sign up for your local library and cut one cord
The likelihood that you pay for any form of internet entertainment is increasing even if having cable is becoming less frequent among Millennials in recent years.
It doesn’t matter if it’s Hulu, Netflix, Amazon Prime, or an Audible membership; it all adds up. Consider cutting the cord and getting your entertainment from your local library instead.
Apart from traditional materials such as books and DVDs, many libraries are updating their holdings and making them more accessible to patrons by providing free streaming services, e-books, and audiobooks.
There are also applications available for download that make listening to free audiobooks more convenient.
Bring your lunch to work a few days per week
It’s one thing to spend money on a nice dinner with friends or your significant other. Spending hundreds of dollars per month on greasy food served in Styrofoam containers, on the other hand, is not a good idea.
An annual average of $80 is spent on takeout lunches in the United States, according to a Visa Study conducted in 2015. It’s likely that it’s even higher these days.
If you make a commitment to bagging it a few days a week for the next two months, you might easily save several hundred dollars over the course of a year’s worth of shopping.
The key to success is preparation. If you want to plan ahead, consider meal preparation’ on Sundays to save time throughout the week.
Then, after you’ve finished shopping and prepared for the week ahead, it’s time to start planning your day’s activities. Roast your vegetables, grill your meat, chop your salads, and hard boil your eggs to make a delicious meal.
Purchasing food in larger amounts at the beginning of the week will not only save you money, but can also help you to prepare a week’s worth of nutritious meals.
Consider spending more time thinking about your leftovers if you aren’t much of a planner. It’s simple to turn anything you prepare at night into something to take to work the following day.
Consider transforming side dishes into full meals, such as turning a side salad or vegetable into lunch by adding some beans, cheese, or animal protein to the mix.
Whatever technique you choose, make sure you have quick snacks like popcorn, almonds, or protein bars on hand at work to complement your meal plan in case things don’t go according to plan. Ramen was always available in the workplace, thanks to a coworker.
On days when it was drizzly and dreary outdoors, walking to the microwave provided him with a hot meal on the go. We were all a little envious.
Get a rewards card and utilize it!
If you have solid credit and a track record of paying your bills on time, you should apply for a rewards card right away. There is a credit card for everyone, whether you desire miles or cashback.
If you know you’ll be getting a new credit card soon, attempt to put money aside for a few large purchases because many cards need a particular amount of money to be spent within the first few months (anywhere from $1,000 to $5,000) in order to qualify for a bonus for creating the account.
Above all else, keep in mind that you should pay off your debt in full every month. Those who fail to comply may find that the interest costs more than cancel out the benefits of the awards. Consider checking out our list of the top cashback and travel rewards credit cards for some inspiration:
Set up a $50 or $100 monthly automated stock market deduction
The conventional financial knowledge holds that money that is never seen is far more difficult to spend.
You may set up a monthly recurring deduction of somewhere between $50 and $100 to be sent to a designated savings account.
After six months, take that money and put it into a mutual fund of your choosing. You’ll have a lovely little nest egg in a few years if you do everything right.
Budget your savings
We’re always talking about how important it is to have a budget in place. It doesn’t matter whether you keep track of your spending by marking envelopes with categories and placing physical cash in them or by using an app that allows you to watch your spending in real-time; good personal finance always starts with a budget.
However, for other people, a budget is a continual source of constraint. For some, continuously measuring their dollars and cents causes them to succumb to impulsive purchases in the same way that Atkins dieters lose control over the breadbasket.
Instead, how about putting your savings into a savings budget? Still, come up with your own accounting for monthly spending (adding 30 percent to accommodate for unanticipated occurrences, such as a huge vet bill), and then save whatever is left over after paying your monthly bills and deducting your income.
You may set up automatic deductions so that the money is taken out of your bank account before you ever notice it, just as you can with a 401(k) withdrawal.
This strategy is not suitable for everyone. However, if you despise the feeling of constantly calculating your pennies in order to remain under your budget, this is a terrific technique to ‘trick’ yourself into saving.
The Verdict
Millennials are confronted with a number of difficulties, the most significant of which is a significant amount of debt, which will only be fully appreciated in retrospect.
In some ways, the future of this generation may even be more unknown than the future of any preceding generation. Their capacity to achieve financial success will be determined by a variety of factors, including economic and political circumstances.
Millennials are investing in the property market, discovering chances for professions outside of the cubicle, and putting more of their money into their retirement accounts, which is a positive development.
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