10 Money Management Tips for Millennials & Gen-Z
Managing money can be a daunting task. After all, we aren’t taught how to take care of our finances in school. So, to help you out a bit, we have put together ten money management tips that you can start implementing right away.
Let’s jump in!
Have a Plan
Failing to plan is planning to fail. Even though it sounds cliche, the saying rings true when it comes to managing your money. Having a financial plan can help you reach your financial goals.
You can have both short-term and long-term goals and plan for both. For instance, your short-term goal can be going on vacation, buying a car, or buying a new MacBook. Your long-term goal can be to buy a home or save for your retirement.
Whatever your goal is, make sure you plan accordingly and put aside the amount of funds that will help you meet your end goal.
Smart budgeting can help prevent you from living paycheck to paycheck. For most young people, money that comes in goes out again. After all, the prices of everyday items are going up (thanks, inflation!).
Having a budget is a smart move to keep your finances in check. That way, you can track all your expenses for any given period and use it to identify your spending habits. With that, you can begin cutting down on avoidable or unnecessary expenditures.
The best part is that there are many budgeting apps that one can download to track your spending.
Avoid Going Into Debt
Easier said than done, right? Absolutely. But, it’s not impossible.
The easiest way to avoid falling into the debt trap is to live within your means. You may need to go into debt because of unexpected expenses, but you should avoid using debt to fund your lifestyle.
Keep an eye on your overdraft and your credit card, and pay off your debts (if you have any) with monthly payments.
Put Money Aside Each Month
A savings culture can be hard to establish, especially if you didn’t grow up in an environment that prioritized one. But, it gets easier the more you embrace it.
You can start by opening a savings account and channeling part of your income to your savings account every month. The interest you earn on savings accounts is negligible today but it will help you get into the habit of putting money aside. Ideally, you should automate the payment.
Alternatively, you could save in bitcoin if you would like your savings to potentially increase in value over time.
Set Up an Emergency Fund
Setting up an emergency fund is a smart move. Everyone should have an emergency fund.
Why? Because you are putting money aside for a rainy day.
An emergency fund exists to cover unexpected expenses, such as medical bills or car repairs.
Even if you don’t use your emergency funds for any contingencies, you will have developed a habit of setting money aside, making saving more of your money easier.
Watch Your Spending
You cannot manage your money without watching your spending. The two go hand in hand.
A good tip for watching your spending is asking yourself whether the purchase you want to make is a need or a want. While a need will have to get sorted immediately, it’s not the same for a want.
A budget will go a long way in helping you watch how you spend your money, thus allowing you to make better financial decisions.
Automate Your Finances
Another great money management tip is to automate your finances.
You can achieve this by setting up direct debits to cover your monthly bills, automating your debt repayments, and auto-rounding up spare cash from purchases into a savings account.
What’s more, you can also automate your investments. For example, you can set up a Bitcoin savings plan with Relai and auto-invest in the digital currency using a recurring bank transfer.
Don’t Take Financial Advice from Social Media
Social media is great for keeping in touch with your friends, engaging with people online, and staying up to date with what’s happening in your areas of interest.
However, it’s not a good place to get financial advice.
Influencers regularly promote financial products and services they don’t understand, and self-proclaimed financial experts often don’t have the credentials to back up their claims.
If you are looking for financial advice, speak to a financial advisor. But more so, start educating yourself on financial matters to start making smart money decisions on your own.
Educate Yourself on Financial Matters
Unfortunately, we don’t get taught how to manage money in school. And unless we study finance, business, or economics, we also won’t learn how to at university.
When it comes to money, we are on our own.
The best way to educate yourself on financial matters is to dig into the subject matter. There is an endless amount of personal finance books, online courses, blogs, etc., that can help you learn how to manage your money. And if you run into questions you can’t find a good answer to, you can always reach out to a financial advisor.
Investing your money is probably the best thing you can do for your financial well-being.
Whether you are well-off enough to afford properties or you’re buying €10 worth of Bitcoin every month, the more you invest today, the higher the chance of being in a good financial position in the future.
While investing comes with a degree of risk, if you build a diversified portfolio of promising investments, you will most likely end up wealthier tomorrow than you are today.