Most of us came of age in the sluggish economy of 2007 through 2010 and we saw the toll the financial crisis took on our parents. To avoid the heartache of going bankrupt, most financial experts recommend an emergency savings of some kind. While the jury is still out on the exact number you should have in your emergency savings, I highly recommend having at least six months of expenses saved in case of unemployment. This means you should be able to make your house/rent and vehicle payment, utilities, groceries, etc., for six months using these savings. This will give you time to search for and start a new job. 

 

I think this is probably on most millennials’ lists, but just in case it isn’t, here is why you should purchase a home. A home is an incredibly valuable asset you can use to build equity. While the home buying process can be a little intimidating, we have more information available to us at any time than we ever had. Do your research, find out how much house you can afford and go for it. Your first home doesn’t have to be perfect, but you can use the first house to eventually move into your dream home.

 

Related: Breakdown of the Homebuying Process

 

If you don’t have credit card debt, you can skip this step, but I am guessing a lot of us millennials do have a credit card balance or two.  With the exception of other unsecured forms of credit, credit cards can have the highest interest rate in relation to other debt. Higher interest rates and fees make for a vicious cycle that is hard to break when you are in your late 20s and early 30s.  If you can pay off those revolving balances, your credit score should increase and you will have one less payment to worry about each month. 

 

Student loan debt in the United States keeps on climbing. We are currently over the trillion-dollar mark on debts owed and it isn’t slowing down anytime soon. Yes, I know some of these balances are high and can seem impossible to pay off, but give it a shot. Buckle down and add an extra hundred dollars every month to the balances and see how quickly they go down. Did you get a windfall in the form of a tax return or an inheritance? Apply the funds to your student loans. Again, one less payment you need to make every month.  And the less you owe, the higher your credit score goes.  It is a win-win. 

 

No, I am not saying win the lottery… or develop a best-selling app overnight. I am saying take some smart financial steps to get you to the million-dollar mark. Does your current employer offer a 401(k) match? If so, get to saving. If you don’t take advantage of a match, you are essentially leaving free money on the table and that is just stupid. The earlier you start contributing to a retirement account of some kind, the more likely you are to be a millionaire in your lifetime. How cool would you be then?

 

I have seen this more and more lately. Millennials take on the job of landlord because rentals are a great source of income. Again, you have an asset that is building equity such as your home but you are also making money in the process. Another fun fact, it makes you a business owner. I think millennials as a whole all want to be their own boss at some point so why not now? The financing of a rental property is a little trickier than your standard mortgage, but it can be done. Just don’t be afraid to get your hands dirty. Landlords are responsible for all kinds of things on rental properties and doing the work yourself can save you some serious cash.

 

Do you have children? Nieces and nephews?  Would you like to see them go to college someday? Start saving now. There are several options for educational savings and some of them are even tax deferred. Speak with a trusted financial advisor on the different options available for education savings.

 

Again, does your employer offer a 401(k)? Why are you not taking advantage of this type of savings? A 401(k) is an investment option and it is easy.  You can set it up and forget about it. You get a quarterly statement and you watch your money grow over time. Another option is to actually get into the stock market yourself with an avenue like eTrade. You can choose companies you want to purchase shares in and play the Wolf of Wall Street as much as you want.

 

Donating just makes you feel good. It also makes underfunded causes successful.  Even Dave Ramsey (the cash only guru) believes in donating ten percent of your earnings to charity.  Bill Gates and Warren Buffet are also famous for giving back. Ten percent may not be feasible for you at this point in time, but donate what you can and regularly. Oh, and keep receipts of donations. These can bring you a tax benefit. 

 

More than half of Americans are caught in the cycle of living paycheck to paycheck so you are not alone. If you are putting money into your emergency fund and contributing to a retirement plan you are on the right track but how does that help day to day? Really take a look at your finances and start directing your money where to go. What I mean is, create a budget and stick to it.  If something comes up and it is not in the budget, it is not going to happen. Obviously, this excludes emergencies. Another idea is to increase your income.  Yes, I know this seems obvious, but how many of us really want to spend our free time with more work? I know I don’t, but it might be something to consider on a temporary basis just to get you to where you want to be financially. Also, don’t get bogged down in the negative of the budget process, remind yourself why you are doing this and look to the happy future.

 

Well, there you have it. Some tried and true tips on financial milestones you could achieve before age 35.  Let me know what the list is missing.

If you enjoyed this blog, take a look at some of our other related articles:

• Mortgage Program Basics
• Everything You Need to Know Before You Start Shopping for a Home
• 6 Smart Money-Saving Habits Of Wealthy People