Financial Tips for Millennials

"Wealth consists not in having great possessions, but in having few wants" - Epictetus



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Entitled. Confident. Adventurous. Risk Takers. YOLO generation. These are yet some of the definitions they tell about our generation, the MILLENNIALS. We are also generation that increasingly comprises the workforce population. Unlike the generations before us such as the Baby Boomers and the Generation X, Millennial Generation tends to do differently at work, preferring to work in groups, want to be constantly recognized or praised for their accomplishments and definitely wants to enjoy the fruits of their labor NOW rather than to work all their life only to enjoy at their retirement age.

Well honestly, who would really want to wait for that long? What would you rather have, an adventurous young life as if there’s no tomorrow but with only bare minimum finances just to meet ends, or drowning yourself to work at young age in order to have the luxurious and comfortable life when you get older but no longer has the vitality of your younger self to fully enjoy what the world has to offer? I bet no one wants either. Certainly, the MILLENNIALS want to achieve both, the financial independence and sustainability while living life to the fullest.

Nothing is impossible. Both can be achieved if you strive and worked hard for it. But you do have to understand that just because we grow up in the instant generation, where almost everything just comes with a click of your hands, you can readily achieve that financial independence of yours. Sometimes you have to meet halfway with want you want and what you need in order to keep the balance of your finances.

Here are some of the basic tips that you may find useful especially for those who have just started their career yet and finding it hard to keep on their finances.

First is you have to set your goals, both the long term and short term goals, what do you want to achieve right now and where do you see yourself in 5 to 10 years from now, do you want to extinguish your student loans incurred from college, help your family in their finances, a house, a luxury car, a business endeavor or even a dream vacation. You have to make sure that it would be a specific and measurable goal with a realistic and time-bound target. Do not make vague goals and merely state that you want to be “Successful by 30”, make it specific like “Be a millionaire by 30”, and then make sure to list your plans and strategies on how to achieve it.

After carefully laying down your plans, start making your own BUDGET. A budget is a basic financial tool that can help you on how to allocate your resources as to your daily needs and savings. Make it simple, concise and realistic and you can even organize it using your spreadsheet programs like Excel to better document it. In formulating your budget you first have to determine the amount of money to be set aside to sustain your daily needs such as food, utilities and house rentals.

Next would be deciding on how much you are willing to allocate to your savings. For this, you can have different kinds of fund which varies as to your needs and your aspired goals. From your net income less the budget for your basic needs, set up different funds as to your liking such as: savings fund, one in which you should definitely give a big portion and make sure you would not easily spend on; education fund, in case you are planning to advance your academic accomplishments such as taking up Master’s degrees, Law, Doctorate or even a second course perhaps; Clothing allowance, make sure to shop decent clothes once in a while to achieve that Dress to Success Look; and lastly Travel and Leisure Fund, have a break and escape the stressful world of your work, while still making sure you have saved enough to reward yourself with vacations in order to revitalize and clear up your mind.

The magnitude of your savings depends on your desire and the urgency to achieve it. For example you want to have your own house and lot by a certain time, you got to make sure you set aside a bigger portion of your savings to your housing fund or you can also make use of housing loans that requires part equity and the remaining to be paid in installments.

Also, make a portfolio of investments, ranging from fixed income and annuity investments to stocks and equity. Do not pool all your savings in one basket to mitigate risks in case of economic inflation and changes in the market. Read the terms of an investment plan and research beforehand before investing money in anything. As much as possible do not incur loans, do not be enticed of acquiring credit cards unless you can manage your finances well, paying as prompt as possible in order to avoid paying those exorbitant charges.

Keep a list of your actual expenditures and compare it with your budget. Make a forecast of your budget plan in order to foresee how much you can save by a certain time. Remember to evaluate if you have been able to achieve your target, identify the factors that hindered you from achieving that target and then make revisions to your budget plan to suit the changes you prefer. Continue monitoring your finances as you go along.

Indeed we are born in a generation where we can easily see the better lives our friends are having just by scrolling the social media, igniting envy towards others and downing on self-pity because you are not having the adventurous and luxurious life that they have. My friend, don’t be easily fooled by then, they might seem to be living their lives to the fullest but their pockets aren’t gold mines either. Spending so much on luxurious vacations and acquiring the latest gadgets and technology just to keep up with the joneses would be your ultimate downfall. They say invest in memories, travels, adventures rather than monetary investments, but keep in mind that your facebook posts and instagram likes cannot be used to pay the bills nor help you in times of emergency and does not guarantee that people on the internet are ready to support you if you would set up a Go Fund Me Page.

Be responsible and be informed. Take advantage of the accessible knowledge you can get from the internet to read and research on financial literacy and basic investments as you can rather than wasting most of your hours scrolling your social media accounts just to wait for likes and appreciation from other people to feel better about yourself. Make a difference in your life. Do not run the race the others are heading, make your own; and compete with yourself only. Only you can give the content and happiness you desire.

"You reap what you sow"

Thank you for reading. I hope you learn something

-Your Lovely Accountant Steemian-