10 Millennial Finance Tips You NEED To Know

Millennials, born between 1981 and 1996, have come of age in a world of rapid technological advancements, economic volatility, and seen pop music change from something quite good to, well... Anyway, navigating these challenges and ensuring a secure financial future can be daunting, but with the right strategies and habits, Millennials can set themselves on a path towards financial success, and in this video, I will explore the top financial tips for Millennials to help them build a stable financial foundation. And if you're new here, why not consider subscribing for more content like this every week? Number one, create a budget. One of the fundamental steps in achieving financial stability is creating a budget. Track your income and expenses to understand where your money is going. There are various budgeting apps and tools available to help you with this process. A budget allows you to identify areas where you can cut costs and allocate more money to savings and investments. And you will be shocked at how much money is wastefully flowing out of your account through an unwatched Hulu subscription here, or an $8 cappuccino at a fancy coffee house you didn't need over there. And also remember, although I advocate the use of credit cards so that you can earn points and cash back on your spending, credit cards do make you spend more, and an MIT study shows that credit cards activate the reward center of your brain and thus drive spending. So if you're using a credit card, budgeting becomes especially important, and if you can't handle it, forget about credit card rewards and just use a debit card or cash. Although if you can use a credit card responsibly, do check out our free credit card guide below, which features some of the cards I personally use and recommend. Using our links does help out our channel, so we do thank you very much if you do. Number two, build an emergency fund. Life is unpredictable and unexpected expenses can arise at any time. Thus, it is crucial to have an emergency fund that covers at least three to six months worth of living expenses. According to a survey by Bankrate, 21% of millennials have enough money saved up to cover six months of expenses, 20% have three to five months, 32% of millennials have savings that wouldn't even cover three months worth of their expenses, and 27% have no emergency savings at all. You don't want to be one of the 27% or even the 32%. My advice is to have at least three months, if not six months of emergency savings saved up. Now, this isn't six months of your total salary, but just six months worth of your expenses like rent, mortgage, food, car payment, etc. This fund will provide a safety net, helping you avoid going into debt when unexpected bills or emergencies occur. Number three, prioritize saving for retirement. As a millennial, retirement isn't as distant as it is for Generation Z. But according to a survey by LendEDU, 40% of millennials haven't started saving for retirement, and 2% prefer not to say, which probably is because they haven't started saving for retirement and they're embarrassed to talk about it. So basically, it's 42%. Now, if you haven't started saving for retirement yet, you should probably start as soon as possible. This is because compound interest is something that works over time. If you start saving $200 per month, which is $2,400 per year at 20 years old, compounding at 8% a year, which is the inflation adjusted average on the S&P 500 over the long term, you will have a million dollars when you retire at 65. But if you started that instead at 35, saving the same $200 per month or $2,400 per year at an 8% growth rate, you would only have just over $300,000 when you retire. That is a shocking difference. And starting at 35, you would have to save around $650 per month or $7,300 per year of your hard-earned cash to have that same $1 million by retirement at 65 years old. So the lesson here is to start early, and you can contribute to employer-sponsored retirement plans like 401ks and take advantage of any employer-matching contributions. Additionally, you can consider opening an individual retirement account or IRA to supplement your retirement savings. Number four, pay down high-interest debt. According to LendingTree, the average credit card interest rate in America today is over 24%. High-interest debt, such as credit card debt, can be a significant obstacle to financial freedom. So prioritize paying down these debts to reduce the interest payments and free up more money for your savings and investments. You can first transfer those balances to a card with a 0% introductory offer on balance transfers or take out a consolidation loan at a lower interest rate. Even 9% on a personal loan is better than 24% on a credit card. You can then start paying down the debt with strategies like the avalanche method or the snowball method. With the avalanche method, you pay down the debt with the highest interest rate first, i.e. the one that is costing you the most money. With the snowball method, you pay off the smallest debts first, and this gives you a sense of achievement as you move through your accounts, paying them off one by one. I actually have one more method that I created that focuses on paying the debts that are having the worst effect on your credit score first. And I go through all three methods in my video on this subject called how to get out of debt the right way. It looks like this, and I will put it on the end screen of this video so you can check it out. All right, let's move on. Number five, invest wisely. Investing is a key component of wealth building, but at the beginning, you need to start by educating yourself about different investment options such as stocks, bonds, and mutual funds. So I would recommend first reading The Intelligent Investor by Benjamin Graham, who was the legendary investor Warren Buffett's teacher. This is the classic investing book that everyone should read. If you want a set of really simple investment strategies, Unshakeable by Tony Robbins is also a great one to get. As a millennial, you don't want a super risky investment strategy. Gen Zers can mess around with NFTs, cryptos, 5X leveraged funds, et cetera, but you are that much closer to retirement than they are. You don't have time to experiment. A stocks and bonds or real estate strategy is going to be the safest. To get started, you can put a portion in stocks and a portion in bonds. Also understand when it is good to go heavier on stocks and heavier on bonds. Like now for instance, six month treasury bills pay over 5% and that's pretty much a zero risk investment and they're exempt from state and local taxes. Also, as you get closer to retirement, traditionally you shift more towards bonds, which are known as fixed income. They pay an interest rate, but the value doesn't fluctuate up and down like stocks do. But you could also look at dividend paying stocks like AT&T. Many people retire on that stock. This isn't financial advice, but it's just to give you a few ideas. And to invest in stocks or bonds or even cryptos, you are going to need a brokerage account. And currently you can get up to 12 free stocks when you sign up for a new account with Webull and fund that account with any amount of money, even with like five bucks. Now, Webull is the fantastic zero commission stock and crypto investing app. It has much better charts and tools than the competition. We won't mention any names, Robinhood. And you can even get 5% interest rate on your uninvested cash right now. For this deal, the minimum you will get is six free stocks at a minimum value of $34 altogether. But the values vary. And if you're lucky, those six stocks could be worth a lot more. In addition to that, also, if you're lucky, you could get 10 or even 12 free stocks at higher values too. The maximum value you can get out of this is over $30,000. Luck of the draw what you get, link is below. All right, now for number six, live below your means. Avoid the temptation to keep up with the latest trends and excessive consumerism. Living below your means allows you to save and invest more for your future. It also provides financial security in case of unexpected changes in your income or expenses. Being able to practice delayed gratification is a crucial skill in living below your means. Something Alex Hormozy talks about a lot. Your ability to delay gratification, it's not just like, oh, I can wait a week or I can wait a month. If you can wait a year, you can make a ton of money. Basically, the idea is when you start earning a bit more money, don't immediately go out and buy a Rolex or a better car. Then you won't actually be making more money because your expenses have increased in line with your income increase. If you want an extreme example, that is also quite inspiring. Check out this clip of Jeff Bezos. You yourself are worth somewhere in the vicinity of nine or $10 billion today. I've got a follow-up question. Okay, perfectly good car. But don't think that gratification never comes. Bezos now has a $20 million car collection, a $500 million yacht and soon to be trophy wife. Like his fiance is not only beautiful, but she's also a former TV anchor and now a qualified helicopter pilot. All this footage was shot by her production company, Black Ops Aviation. He even has a figurehead of his trophy wife on his $500 million yacht. And I think all that stuff is worth waiting for. So keep your expenses below your income level. And then as your income increases, you'll have more money to invest. And then eventually your investments will bring you income that you can then spend on fancy cars, yachts, wives, et cetera. Well, just one wife, you know what I mean. All right, let's move on. Number seven, build multiple income streams. In today's gig economy, it's easier than ever to supplement your income. Consider side gigs, freelance work or rental income from a spare room or property. Multiple income streams can provide financial flexibility and help you achieve your financial goals more quickly. The average millionaire has seven income streams according to data from the IRS. This means that if one stream dries up, you have six more to rely on. When just starting out, a extra income stream could be just a side gig in addition to your day job. So if your main salary doesn't leave any money to invest at the end of the month, maybe you could just do $200 worth of Uber driving per month to invest in your retirement account. And as you get wealthier, you can start to accumulate more and more income streams and some of these will be passive income such as dividends from stocks or rent from a rental property. For myself on YouTube, I have many different income sources to count. We have Google AdSense, we have integrations in the middle of videos, affiliate links, et cetera. And I'm expanding outside of YouTube with Airbnb properties which are semi-passive. You still have to do some management but it doesn't take that much time. But to get to this level or to the level of millionaires with seven income streams, you may need our next tip. Number eight, invest in education and skills. Investing in your education and skills can lead to way bigger increases in income than investing in the stock market or in properties especially when you don't have that much money to start with. Now as a millennial, you've probably already got a degree and if you haven't got a degree, you probably aren't planning on getting one. So I'm not talking about a college education here. But if you're thinking of starting a business, investing in books or online courses is the best way to start before you even think of buying stocks, products to sell or a property to rent out. If you're stuck in a job you feel is a dead end, you may want to look at education you can do online or in the evenings while you're working that will open up a new line of work with a higher income. Examples of this could be getting your real estate license or doing a commercial driver's license. Both could open up new job opportunities for you for more money and the results are way more immediate than putting say $10,000 in stocks and waiting for them to go up by 8% per year. Number nine, protect your assets. Insurance is an essential part of financial planning. It is good to ensure you have health, life and disability insurance as well as renter's or homeowner's insurance. These policies protect you and your assets from unexpected events. Like for example, if I die, my home insurance pays off my mortgage in full so my wife gets a free house. This takes away probably the biggest single expense per month for her. Now looking at health insurance, currently I only have health insurance for my kids, not for me or my wife. But that doesn't mean I don't have a plan for a medical emergency. There's a great book called The Self-Pay Patient that shows you ways you can actually get a better deal on your healthcare by not paying for traditional health insurance options. If you want to go that route, I recommend you read that book. Otherwise, get health insurance and avoid bankrupting yourself in the case of a health emergency. All right, that takes us to our final millennial financial tip. Number 10, set specific financial goals. As a millennial, the youngest you are going to be is 27 years old and the oldest is 42. No matter where you fall on that spectrum, you need to have certain financial goals because you're already in the prime of your financial life. Median earnings in the US peak between the ages of 45 and 54 and you are approaching that age range. So you need to have your career set and be on a solid track to spend those key peak years earning the highest income you will make in your entire life. So my advice is to set clear, achievable financial goals for both the short-term, the medium-term, and the long-term. Short-term goals could be saving for a down payment on a house to get into the habit of saving several hundred dollars every month for retirement or learning a new skill that will increase your income. Medium-term goals could be buying a property or establishing a company and long-term goals could be reaching a certain net worth or a certain dollar amount of retirement savings by the time you turn 65. Now in conclusion, millennials face unique financial challenges but being part of the millennial generation also has its sweet spots. As the baby boomer generation dies out, millennials are expected to inherit around 68 trillion dollars by the year 2030. This could transform the lives of millennials and allow them to realize their dream of home ownership, starting a business, or significant investments in the stock market or property. But whether you inherit money or not, by following the tips in this video, millennials can build a strong financial foundation, achieve their goals, and work towards financial independence and stability. The key is to start early, educate yourself, delay gratification, and make consistent effort to manage your money wisely. Thanks for watching guys! If you want 12 free stocks from today's sponsor Webull, do click the link below. Otherwise, please subscribe if you're new. Leave your thoughts on this topic below. I'd love to hear what you think. I'll see you next time. Bye-bye!