Looking to manage your money smarter? Here are six important financial goals to help you resolve to be better in the new year.
The average millennial is described as drowning in debt, without much savings and as investing too conservatively. This does not paint a very promising picture for this generation. But a study by Schwab’s indicates that the financial standing of many millennials is not as grim.
For instance, about a third of millennials have a financial plan and a documented financial plan. This is in contrast to the two generations above them, the Gen Xers and Baby Boomers. In these generations, only 20% and 22% respectively have taken a similar step.
Similarly, it has been brought to light that millennials are more likely to have specific financial goals than their older counterparts. They are also more likely to seek the services of investment advisors and regularly rebalance their portfolios.
However, even in the face of these promising trends, this group of people is still dealing with a lot of debt, with 75% of them have some kind of debt or another. About ten percent of these people have debts in excess of $100,000. In fact, due to debt, some of them have had to put off buying a house and getting married. Here are some financial goals for the wise millennial:
While the study above showed that millennials are becoming saving junkies, it was also discovered that many of them are less likely to save for long-term financial goals than their older counterparts. Millennials have no problems saving for a vacation, but saving money for more lasting financial goals remains a challenge for many of them. Therefore, the wise millennial should try to make long-term saving more of a priority for better financial health.
Young people don’t generally take life insurance seriously, although they should. The reason is that they are young and healthy, and it does not seem to make much sense to insure themselves. However, life insurance is very important. For instance, as a millennial with a family, the insurance can take care of your family’s financial needs in case you leave.
Besides, the longer you wait to get life insurance, the more premiums you will pay, and this can affect other financial plans you might have at the time. Also, choose a great life insurance company. Whippio has varied life insurance offers for all types of clients.
Most millennials don’t realize that they have one very valuable asset – time. Because they have a lot of time in their hands, they also have a great opportunity to invest and build a fortune that should serve them and their families in the future.
For instance, to create an empire worth millions of dollars by the age of 70, an 18-year-old would need to invest $71 a day in an investment plan with a return of at least 9% per year. A 38-year-old would need $448 to achieve the same financial goal under similar conditions. So, any smart millennial should start investing as early as possible to realize his/her great long-term financial goals.
4. Plan on Having a Home
A great way to secure your future is to have your own home. Unfortunately, this financial goal is not a priority for many millennials since they tend to focus more on short-term goals. Additionally, many of them have debts to worry about. However, if you are smart, you would start planning on owning a home as soon as possible. Homes turn into sources of wealth for many retirees.
5. An Emergency Fund
Due to their perfect health, and few financial obligations, young people don’t generally feel like they have to worry about emergencies. But this fund can be very important, even to a young person. With adequate emergency funds, for instance, you do not have to end up taking a bad paying job and getting stuck at it because you lacked any cash to get by as you seek a better paying opportunity.
6. Have a Side Gig
A smart millennial should work on having a side gig. Many people are starting to realize that after retirement, the idleness can be a bore. Therefore, having something of their own they can work on can make this part of their lives more fulfilling. Best of all, the side hustle can generate additional cash that they can use to meet other financial goals in life.
The wise millennial has to think of the future. Most of them don’t pay attention to this, and that is where the problem lies. Planning for the future is very important. Fortunately, above are 6 financial assets a millennial can use to safeguard their financial future and stabilize their present financial situation.