Money Management for Millennials (How to Bulletproof Your Bank Account)

Money Management for Millennials (How to Bulletproof Your Bank Account)
  • Opening Intro -

    Millennials are the generation everyone is interested in talking about.

    Since we were young adults and teenagers, we were immersed in the 2008 world.

    This was the world of unprecedented financial collapse.

-------------------------------------

The words, “recession”, “economic crash” and “quantitative easing” have been ringing in our ears our whole lives. Has this affected millennials negatively? Many claim so, however, the conception of millennials being lazy, near-nihilist spend thrifts isn’t exactly accurate. In fact, according to a CNN poll, 31% of millennials claim that the American Dream is “alive and well”. This is almost double what their parent’s generation felt.

It is without question that we live in a post-2008 world, and the traditional work model of our parents and grandparents is quickly becoming redundant. The world economies are changing, and millennials are the ones who will shape this new future.

What habits do millennials need to develop now to keep up with the new demands of the economic system? Let’s see.

1) View Savings As a Tax

A 2016 poll by bankrate showed that Millennials are the group who save the most out off all current workers (around 6-10% of income). Since millennials have little to no faith in large traditional financial institutions, they are more aggressive with their savings.

This is a habit that is great to start now. Millennials saw the previous generation, with their small savings and reliance on institutions, fail. Therefore, getting into the saving habit is an imperative, and can protect against future market uncertainty. Savings should not be seen as optional. View them as a tax you owe to your future self.

2) Rent Where you Live, Own where you rent.

The traditional middle class narrative goes along the lines of, “buy a house, pay off the mortgage, and you will have created wealth”. We now know that since 2008, the housing market is not as solid as traditionally thought.

So what’s the new advice you should take? To rent where you live. This is a good idea as it affords you flexibility to move around. This flexibility is key in the current world economy, since fewer things are becoming centered on a physical location. The internet requires you to be flexible with where you can be.

To own where you rent. One of the best ways to maximize income streams currently is renting out property. It may be a little time before you can buy a house/apartment, but the goal should be buying to create income. Traditional wealth creation strategies of our parents are dead. Read more about that here, http://read.bi/2c92TvX.

3) Be careful of the stock market, but not too careful.

At this point, managed funds, and the majority of financial products released by big banks are viewed with suspicion. It is well reported that 86% of active equity funds (or managed funds) under perform. So buying financial products will generally cost you huge fees, and make you a yawn-worthy return.

What’s the alternative?

Think long term.

There are some great options out there, for instance, Vanguard, who offer low cost index trackers. These index trackers will follow (for example) the S and P 500, with a spread of all the companies. Looking at this from a long term viewpoint, this will outperform the vast majority of managed funds sold by banks. Investing this way is a great way to get a decent return over several decades.

4) Avoid debt.

Millennials are at a time where huge amounts of student debt are floating around. Add to this that credit and loan rates are not attractive.

Although this has resulted in a reduction in personal debt, many studies have shown that millennials are still very affected by “keeping up” with their peers. One of the trappings of the huge amount of social media consumed by millennials is the constant exposure to the glamorized lifestyles of others. It has been shown that this is affecting the spending habits of millennials, causing many to take out high interest loans or credit.

This mental shift should be avoided. Remember, Instagram lifestyles can be faked, so don’t fall for it. Stay debt free, and concentrate on generating real wealth.

The harsh economic climate millennials grew up in doesn’t need to be a disadvantage, there are many lessons to be learned from the previous generations. These points, if followed can help you and your friend bullet-proof your finances for the coming years. So perhaps instead of sharing a picture of your new watch against the steering wheel of a rented car, share this article, and help other millennials to sort out their finances too.

 
SaleBestseller No. 1
Creating Wealth: Retire in Ten Years Using Allen's Seven Principles of Wealth, Revised and Updated
64 Reviews
SaleBestseller No. 2
Creating Wealth: Retire in Ten Years Using Allen's Seven Principles
9 Reviews
Creating Wealth: Retire in Ten Years Using Allen's Seven Principles
  • ISBN13: 9781451631586
  • Condition: New
  • Notes: BRAND NEW FROM PUBLISHER! 100% Satisfaction Guarantee. Tracking provided on most orders. Buy with Confidence! Millions of books sold!
Bestseller No. 3
Creating Wealth Through Self Storage: One Man’s Journey into the World of Self-Storage
34 Reviews
Creating Wealth Through Self Storage: One Man’s Journey into the World of Self-Storage
  • Mark Helm
  • CreateSpace Independent Publishing Platform
  • Paperback: 128 pages

Last update on 2017-07-21 / Affiliate links / Images from Amazon Product Advertising API

-------------------------------------------------------------------------------------------------------------

end of post idea

-------------------------------------------------------------------------------------------------------------

Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.

Categories: Savings

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload CAPTCHA.