If you were born between 1981 and 1996, you're in the "millennial" generation, and you're between about 29 and 44 in age. You may also be struggling financially. According to a recent report from Bank of America, between about 20% and 23% of millennials are living paycheck to paycheck, defined as spending more than 95% of their incomes on necessities. Yikes!
So what should millennials who are struggling a little -- or a lot -- do? One powerful strategy is to make a plan. Start being proactive about getting in better shape financially. I don't mean to be glib, though, because the headwinds millennials are facing are real, such as a tough job market and inflation.
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Here are some actions you might take:
- Draft a household budget. Scrutinize your spending, to see exactly where your money is going and how you might rein in unnecessary spending -- such as on unused streaming services, gym memberships, and so on. You might also cut back on dining out and going out with friends (host some game nights or movie nights at home instead!). Plan how you want to spend your money, including on savings and investments.
- Get out of high-interest-rate debt. Some debt, such as a mortgage, is rather unavoidable, but at least that tends to be lower-interest-rate debt. But if you're carrying high-interest-rate debt, like debt from credit cards, it's critical to pay that debt off as soon as you can. Such debt can have you moving backward instead of forward when it comes to your financial health. You might look into refinancing or consolidating some debt, too.
- Downsize if you can. If your household has two or three cars, see if you can get by with one less, saving on insurance, maintenance, and more. You might consider moving to a less costly home, too, or take in a boarder for a while.
- Automate your finances. You can start small and scale up, if need be. Your bank likely allows you to make automatic payments, so set some up to go directly into your brokerage account. Then you can regularly invest in stock with that money.
- Aim to earn more. You can do this in multiple ways. First, ask for a raise. Such requests are successful more often than you might think, especially if you deserve a raise. You might also take on the work of making yourself eligible for higher-paying jobs. That might require earning another degree, certification, or professional designation -- for your current career or a new one. Taking on a side gig for a few or many years can be a powerful move, too. (An online search will turn up lots of possibilities.) You might, for example, give music or language lessons, make and sell things, start walking dogs in your neighborhood, or drive for a ride-sharing service.
- Live below your means. If you're not already doing so, aim to live below your means, which means spending less than you bring in. Seek out and use coupons and discounts for items and services you need to purchase. Maybe make some games of it -- perhaps only allowing yourself to spend money every other day, having occasional no-spending weeks, or competing with a friend to see who can spend the least in a week.
However you go about it, make a plan and stick to it, and you may soon find yourself financially healthier.
