When it comes to managing your finances and securing a solid overall financial position, there are a few things you’ll want to do from time to time.
These things are meant to help you get a better understanding of where you stand and will also highlight some places that you are falling short.
Even better, some of these tips can help you bring in a little extra income. Together they make up the standard financial to-do list and by following through on these financial tips for Millennials over time, you should notice a difference in your financial situation as well as overall prosperity.
Financial Tips for Millennials: 5 Steps To Take Today
Take into account these financial tips for Millennials and improve your financial health today and over time.
1. Calculating Your Net Worth
This is a practice you should repeat at least once a year, as it is not only useful information but great for getting a sense of current income and debt levels and how close you are to any financial goals. Simply put, the equation for doing this is subtracting what you owe, your liabilities, from what you have, your assets.
Your list of assets will include both your liquid and illiquid wealth, so things as your house, your car, how much you have saved in the bank, the value of your investments, etc.
Liabilities will be loans you have to pay, the mortgage on your home, and your outstanding credit card balance.
At the end of the calculations, you want your number to be positive, which indicates you owe less than you possess.
There may be times where the number is negative, but know it just provides a snapshot of your financial position and will change over time depending on what you’re doing in life.
Once you know that number, you can check where do you stack up against the average American net worth. You can also use free budgeting apps like Empower to track your net worth on a daily basis.
Here is what that looks like with real numbers. Say you have $4,000 in checking and savings, a car worth $12,000 and $9,000 in a retirement account. That is $25,000 in assets. Against that you owe $3,500 on a credit card and $14,000 on the car loan, so $17,500 in liabilities. Your net worth is $7,500.
Write that number down with today's date. The single number matters far less than the direction it moves over the next six months, and you cannot see direction from one data point.
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2. Make Financial Goals
Just as important as working to maintain good financial standing is to make goals for yourself.
The true benefit of making financial goals is to act as a motivator to push you to achieve what you outlined for yourself and these goals can take a number of forms.
First and foremost, it is important to designate short-term and long-term goals as they will help you to cater to your behavior and habits within each respective span.
Also consider setting stretch goals, or particularly difficult goals to attain as well. These can help improve engagement and performance over time.
Following goal creation, it is important to budget as a means of planning out how you are going to achieve what you outlined for yourself.
When creating your budget, make sure you give yourself just a bit of wiggle room to get accustomed to spending-conscious behavior.
You can also automate the tracking with free budgeting apps like Rocket Money. The free tier links your checking, savings, credit card and investment accounts, finds every recurring subscription and bill, and shows you where the money actually went last month.
One caveat most articles skip. Bill negotiation is a separate paid concierge service, not something the free app quietly does for you in the background. Whether you save $100 per month depends entirely on which bills you actually carry, so treat any fixed dollar promise with suspicion. It is still one of the best money saving apps for catching what you forgot to cancel.
- Lower your internet, phone, and cable bills automatically
- Trusted by over 5 million users to cut monthly expenses
- Contacts providers to find discounts and hidden savings
- Saves users an average of $300 per year
3. Identify Recurring Charges
Sometimes little fees and charges manage to slip through the cracks and avoid detection while still costing us money.
Over time, these tiny expenses grow and can undermine the goal of overall financial health. Whether it’s a subscription to music apps Spotify or just tiny things around the house like leaving lights on, identifying where these charges are incurred will pay you back several times over and will help you to engage in more financially-friendly behavior.
You can use your credit card bill or changes in your utility payments as a means of identifying where you’re spending unnecessarily. Start by canceling any unwanted memberships and also try to make easy lifestyle changes.
The faster route is an app that keeps every recurring charge in one view. Monarch Money links your checking, savings, credit cards, loans and investment accounts, then surfaces the recurring transactions so the forgotten ones stop hiding between paychecks.
What it actually does:
- Shows every account in one dashboard, from checking to mortgage to brokerage
- Surfaces recurring charges so you can spot what you meant to cancel months ago
- Tracks your net worth over time, which ties straight back to step one
- Forecasts your cash flow so you can see next month before it arrives
- Supports shared household access if you manage money with a partner
Be straight with yourself on cost. Monarch has no free tier. The annual plan runs about $99, or roughly $49 for the first year with code MONARCHVIP. That pays off when you have several accounts and a partner to coordinate with. If you only need to watch one checking account, the free Rocket Money tier above is enough and you should not pay for this.
- Connects all your accounts in one dashboard, including checking, savings, credit cards, loans, and investments, so you see your full financial picture at a glance
- Tracks net worth automatically and shows how it changes over time
- Custom, flexible budgets that adapt to your actual spending instead of locking you into rigid categories
4. Side Hustles
It’s always nice to bring in a little extra money, especially for those who may not be making quite as much as they would like or are just looking for a little more.
Side hustles are a great way to increase your income and sometimes they don’t even require much effort on our part.
Opening up your home as an Airbnb host is one way to start earning more cash. The company institutes a number of safety measures and clearances required of guests and hosts and enables you as the homeowner to determine exactly who you want to host. It’s also a great way to meet people of diverse backgrounds.
Your options aren’t limited there as other gig economy jobs let you be your own boss and work the hours you want.
If you do not have a car or a spare room, start smaller. Testerup pays you to test apps and websites from your phone, so there is no vehicle, no schedule and no customers involved. Tasks are short, you can do them from the couch, and it is the lowest friction way to turn dead time into a first payout while your bigger side hustle gets going.
5. Check Your Credit Score
Your credit score is a value out of 850 that indicates your creditworthiness based upon your credit history.
It is a key determinant in your ability to take out loans and bring on debt, making it a very important part of your financial package.
Knowing your credit score is important for not only assessing what it will allow you to do but also how pressing a matter it is for you to actively work to improve it.
There are several resources that will enable you to check your score.
On the FICO scale, here is roughly where you stand:
- 800 to 850 exceptional
- 740 to 799 very good
- 670 to 739 good, and the tier where most mainstream mortgages, auto loans and rewards cards open up
- 580 to 669 fair
- 300 to 579 poor
Your score and your report are two different things, and the report is the one that actually contains the errors. You can pull all three bureau reports free every week at AnnualCreditReport.com, which is the federally authorized site. Weekly access became permanent in 2023, so there is no reason to pay anyone for this.
The best credit score apps provide users with a look at their free credit score along with savings advice.
It’s important to note that a hard credit score inquiry, where your score is acquired as a response to an application for credit, will lower your score for a time.
There are certain periods where this is not the case but know that a hard inquiry will last for several years on your credit report.
Take Action Today on Millennial Finance Steps!
To-do lists can vary from person to person but these five financial tips for Millennials are essential for getting you started.
It can be a little overwhelming at first when you’re trying to get a better grip on your financial situation, but being mindful of it and following through with good financial behavior are the keys to success.
Figure out the money-saving tips and strategies that work for you and watch your finances improve.
Do you have any financial tips for Millennials that have worked for you? Let us know below!
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