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Achievable Money Management Strategies For Millennials

Achievable Money Management Strategies For Millennials

Yes, today we’re talking money! As millennials, we struggle to stay on top of our expenses, so money management seems to be a skill that continues to slip between our fingers.

I love being a millennial; I am proud of how we have adapted to the difficulties our generation has faced. We are innovative both in our personal and professional lives; we know how to think outside the box, and we certainly know how to experience life.

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Living through two recessions on salaries that went down instead of up, carrying our student debt like a flag, has taught us to be as creative with money as in all other aspects of our life. Most 20somethings and 30somethings are now exploring ways to save more, trying to ensure a steady income, which allows them to settle down and have a family.

This means they are trying to find the best money management strategies to keep their finances in top shape. Surprisingly, the basics of money management are simple and easy to embrace. Moreover, we’re already familiar with all these things, as you will see.

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Set up a goal

As millennials we know plenty about setting goals, measuring them and making them achievable. Applying those skills to saving is as straight forward. For example, you decide to set up an emergency fund. For this, you need to analyze how much are you spending and where can you cut down.

Let’s say you look at your monthly expenses over a few months’ period, and add them up. Multiply the figure by two and you have a goal when it comes to establishing an emergency fund. The next step is learning where can you cut down. You might realize you don’t need to leave the light on in the hallway when you are not home, so you might start saving money on electricity.

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Or you decide you can swipe the daily latte with something healthier and cheaper, so you’re going to save money from this area. Checking your credit cards can give you more options when it comes to saving. Regular budget analysis can offer you insights on the areas where you can cut down the expenses, so you should be doing this analysis twice a year.

Take it as a challenge

As millennials we enjoy the experience of life as we live it, we enjoy challenges and new things. Money management doesn’t have to be a boring task, it can be fun and easy. Use your tech-skills and spend time researching investment options, use your social media skills and learn what is available through blogs and podcasts.

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Learn about ETF’s (exchange traded funds), discover the attraction of hedge funds, and brokerage accounts. Explore your options using robot-advisors rather than expensive financial advisors, which can help identify your risk tolerance and style of investing. Moreover, you can do it all from a smartphone.

Automatize your payments

Millennials are good with technologies so take advantage of this and automatize your payments. Put all the bills and purchases on a rewards credit card. This way, you will be paid off in full at the end of the month. Because you will never lose a payment, your credit score will increase, which helps you save on the long run.

Millennials do not like to waste time, and something that is very attractive to us is one-click money management. There are some seriously good financial apps that guide, encourage and do the work for you, once you set them up. Leaving us with time to get on with the now of living – something else we are rather good at.

Featured photo credit: Alejandro Escamilla via hd.unsplash.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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