7 Financial Tips from Millennials (for Millennials)

We've been having some really interesting conversations inside of the Debt-Free Millennials Facebook group and a question popped up, what would be your top three pieces of financial advice that you would give to other Millennials? Well, actually there were seven tips that came out of this conversation and I wanted to share it here on the channel. Hey what's up guys, it's Justine with Debt-Free Millennials, the channel to help you crush your debt and live payment-free. If you are interested in living a no-debt life then scroll down to the bottom and hit that red subscribe button so you never miss another video from me and today we're going to be talking about just top tips that Millennials want to give to other Millennials or maybe even younger generations of things that they've learned throughout the course of our what 30 plus years on earth and figuring out the personal finance journey. So I wanted to share those tips with you right here. Okay the first tip that came up again and again was to invest in your retirement. Whether you are working with a 401k or you have a self-employed plan, bottom line is to invest in your retirement and invest early and often. So if you have a 401k with your employer you want to make sure that you are contributing at least up to the match and even if you are in debt, this is a controversial subject if you are a Dave Ramsey follower, but even if you are in debt all the Millennials inside of the Facebook group are saying contribute at least up to the match and still continue with your debt payments. Also another thing is when you set up those contributions into your 401k they're just automated for you and you can even do this with outside brokerage accounts and investing accounts like what I do with my self-employment plan. It's just automatic. I don't think about it. I don't have to worry about whether or not I'm contributing to my retirement. It's set up and done for you so make sure that you have this set up through your 401k or through an outside investing firm so that it's automated at least once a month you're contributing to your retirement plan. The second tip that came up a lot was don't compare yourself to anybody else. So stop trying to keep up with the Joneses. The way that I see it is there's always going to be, this is actually a piece of advice from my father-in-law or somebody in my husband's family, there's always going to be somebody with the bigger boat, the bigger house, the nicer car. Always always always there's going to be somebody even when you think that you make $75,000 there's going to be somebody who makes $100,000 and once you get to that point there's going to be somebody who makes $150,000. So if you keep striving and putting the bar farther and farther away you're kind of forgetting to enjoy where you're at and how far you've come. Maybe you started just like I did making $10 an hour and then moved up to $33,000 per year then moved up to $41,000. So don't forget all of that work that you've done for yourself and you can't compare your journey to anybody else's. Everybody else's financial situation is different. They had different types of debt. Maybe they started paying their debt off younger or older than you or maybe they started contributing to their investments before you or after you. The bottom line is keep in your lane, stay in your lane, head down, focus on your financial goals and you can peek up along the way to see okay how did this person do it but don't compare yourself and get into that comparisonitis. The third tip is to learn to say no. So you have to learn how to say no otherwise you get yourself into this bad habit of these spending patterns that keeps you from achieving your financial goals. So you have to learn to say no to eating out for lunch every single day during the work week or saying no to amazon purchases and actually stepping away from the online shopping cart for 24 hours before you make that decision to buy something. This is also true for things like going on vacation or buying a newer nicer car. When you get into these patterns of again keeping up with the joneses then you're going to get into these bad spending patterns. So learning to say no is a really good idea for your personal finance journey. In fact when I was paying off $35,000 in student loan debt I told myself that it's okay to go out to lunch but I can't do it every day. So while I was working this plan is Monday through Thursday I would bring my lunch and then on Fridays if I wanted to go out to eat or order something I could and I gave myself permission to have that little win or that treat on Fridays instead of spending money going out to eat every single lunch throughout the week. I actually still practice this pretty much in theory. So my husband and I really don't order takeout during the week. Fridays is our dedicated takeout day so we will typically order food on that day and so we're still giving ourselves permission to order from restaurants or eat out but it's not overwhelming our budget and we can still hit our financial goals. I'd actually like to know what is one thing that you are learning to say no to. Is it online purchases, food just like us? Let me know in the comments below. Okay the next tip is don't defer student loan payments. Student loans is a big topic right now because they have been on administrative forbearance since the pandemic hit and they will be on administrative forbearance until September 30th of 2021. That means there is no interest accruing on any federal student loans right now and you're not required to make any payments. However back in the day when you could defer your student loan payments for things like you're in graduate school then those student loans depending on what type you had actually accrues interest while you're not paying any money on them and so they can end up ballooning thousands and thousands of dollars more and it's just a really hairy predicament to be in. So you want to make sure that once you are in that once that grace period is over and you're back into that repayment status that you are making payments consistently every single month. Okay the fifth tip is don't buy a brand new car. So cars depreciate instantaneously. It doesn't matter if it's new or used. Cars do depreciate over time. Now if you buy a brand new car off the lot their value can depreciate instantaneously between 15 to 20 percent. That's crazy. So if you're going to buy a car make sure you are looking for a used car and you can still buy used cars at dealerships. We actually bought our Subaru Forester as a a certified pre-owned vehicle from the Subaru dealership or you can find tons of great deals on Facebook Marketplace or Craigslist. I actually listed my old car for sale on Craigslist and I had a wonderful experience with it. It was super easy. The thing is with cars is they can be so expensive. Like we're talking you know 30, 40, 50 thousand dollars for really souped up vehicle which is fine but you got to take into consideration how that impacts your personal finance journey. So if you still have forty thousand dollars in debt and you're wanting a forty thousand dollar car that's really not going to match up and really help you in your personal finance journey. You have to think about ways that you can temporarily cut back and maybe you're not getting the nice forty thousand Jeep Grand Cherokee but instead we're looking at an older you know five to six year old Honda Civic that's a lot cheaper. Can you make that work temporarily over the next five years while you're paying off your debt? These are some short-term sacrifices that you really have to think about. When I was paying off my debt I actually drove the exact same car that I had in high school. So this car was gifted to me when I was 15 and I had that car all the way up till I was 25, 26. Yeah 26 years old and so it ended up being a great vehicle because it was paid for the insurance was really cheap the gas was really cheap and I could focus on my debt-free journey and then once I got into a financial situation where I felt like things were progressing I was making more money Kyle and I were coming together with our finances then we could save in cash for a second car. I actually have a video on how you can save for a car in cash if you want to check out that video I will link to that right up here. Okay your sixth tip from the millennials is responsible credit card usage. We all know this that getting into credit card debt is probably the worst type of debt that you can have and that's because the interest rates are so incredibly high. We're talking upwards of 30% or more on interest that you could pay on your credit card if you keep a balance and if you don't pay it off every single month. Now there are a lot of folks that just say I don't want a credit card at all. I used to be one of them until Kyle and I had a conversation about responsible credit card usage which we totally think you can do. So you got to make sure that you are paying off your balance every single month and watching those limits making sure that you are not spending over 30 to 40 percent of your credit limit. Now if you are a credit card user and your limit's lower you can call your bank or the credit card company and ask for them to increase your limit amount. So if your limit was a thousand dollars call back in six months after responsible credit card usage and ask if you can increase it to five thousand dollars. Another thing is when you are spending with a credit card and you see how the debt has ballooned over time sometimes you kind of forget what you actually spent money on for that credit card and think about it this way if you leave a balance you're actually paying whatever the interest rate is let's say it's 25% you're paying 25% more on that particular item. So if you used a credit card to pay for things like a tv deal from Costco or you bought a bunch of clothes from Gap you're actually paying 25% more even though you may have gotten those as a deal or on sale you're paying 25% more because you're paying interest on those things. So actually one girl inside of the Facebook group had a spreadsheet of all of the things she bought with her credit card and every single time she made a payment to pay off her credit card debt she would black out one of the line items of something that she bought. So it was kind of cool to see okay yes she's completely paid for this Eddie Bauer backpack she's completely paid for this lampshade at Target and it's done. If you're working on your credit card debt-free journey this is a really cool way to keep you motivated and help you keep making those payments. Lastly the best tip that came out of the Facebook group is to have a fully funded emergency fund. Now I did extensive research on emergency funds and found that at least six months of living expenses or more is the right amount of money to have inside of an emergency fund. I have a whole video on what that looks like linked up here if you want to check that out but the bottom line is I keep saying bottom line so funny what you want to make sure is that you have a fully funded emergency fund after you've paid off your debt. Now if you're in the middle of your debt-free journey right now two to three months of living expenses is ideal to have after you pay off your debt then you can go and really fund that account with at least six months or more of living expenses. When I talk about living expenses I mean basic things that could get you through in case you were to lose your job or have a major medical emergency. So we're talking things like your rent or your mortgage payment, being able to still pay your utilities, buy groceries, and any car related expenses including insurance, tags, gas, and if you have any debt payments you want to make sure that you're still able to cover that kind of at the back end. Okay so those were the seven best tips that came out of this question inside of the group but there were also things like having multiple streams of income or looking for scholarships and cash flowing your tuition. Also setting up 529 plans for your children so that they don't run into the same issues that we've all been experiencing with student loan debt. So I want to know what what would you add to this list? What's your biggest takeaway from this video? Leave me a comment below. If you like this one give it a thumbs up and I'll catch you in the next one.