This post is was originally published on Investor Junkie
Hey guys, it’s time to get a handle on your money.
It’s time to stop overspending, start saving and finally figure out what exactly is going on with your retirement accounts, right?
If you’re a 20 something or even in your 30s, you’re in a unique financial position. We have a very different job market and pay scale than our parents did, and the definition of work is constantly changing.
So of course, what makes sense for our money is going to be different than what your uncle might have told you over the holidays.
Here are 10 moves that financially savvy Millennials should make this year. This can absolutely be your year when it comes to your personal finance if you plan ahead, start now and really commit to getting your money in a good place.
Step 1: Find a budget style you love.
Ask anyone who has money, works with money or reads about money: Tracking your income and expenses is always step one for getting your financial life together.
Budgeting is a way to keep yourself accountable about your spending. You can’t change any habits if you don’t know what those habits are!
Or you can go old-school and list your income and outcome in a notebook. Spreadsheets are a nice mix between doing it totally digitally and manually tracking. You can build a spreadsheet for yourself that is color coded for expenses and has formulas to automatically calculate things such as your total expenses or earnings.
Step 2: Start investing with a robo advisor.
I have news, fellow Millennials: We’re not as young as we once were. There’s no time for investing like right now. When it comes to making money in the stock market, you make more the longer you can leave your money in it. So the earlier you start, the more interest compounds in your favor.
Start today with a robo advisor. The great thing about robo advisors is that you can start small, they don’t take a lot of time, and you can get your foot in the door of investing right away. We highly recommend Betterment and Wealthfront for beginning investors. But you can take a look at our top robo advisors here.
Step 3: Figure out what to do about your debt.
Millennials carry much larger debt burdens than our parents ever did, thanks mostly to student loans. It’s a rare 20 something who doesn’t currently have, or didn’t ever have, debt at some point.
Getting rid of debt as fast as you can is a good move, but it’s a pretty vague goal. Instead, make a concrete plan for your debt. List out the types of debt you have, the interest rates, and which account you want to pay off first. Being organized and having a plan of attack makes becoming debt-free much more likely.
Guys, paying off your debt is totally doable. I know, because I did it for myself. Here’s how.
Step 4: Sketch out a 5-year plan.
You don’t have to know the details of what you want in the next five years, and you don’t have to be forever married to just one plan. Life moves fast and things change; I get that. But if you’re someone who is always saying, “Someday I’ll get to South America” or “I’ll eventually pay off that credit card,” you need to definitely sketch out a plan.
Having a plan in front of your eyes will show you where you really want to be and give you an idea of what you need to do to achieve that.
Step 5: Ask for a raise.
Raise your hand if you couldn’t use more money.
That’s what I thought. Asking for a raise is important because not only does it put more money in your pockets right away, it also helps increase your future earnings. You set the earnings bar for future jobs with the job you have now.
Step 6: Talk to your partner about money.
Being on the same financial page as your partner is a necessity for a healthy relationship. Money should be something you can communicate openly about with your partner. If you’re single, practice this with your friends. Ask them how they feel about money, if they have debt, and what they want their financial future to look like. Share your own goals and realities. Money doesn’t need to be a mystery — talking about it makes it easier to manage.
Step 7: Sell stuff you never use.
Do you have clothes that still have the tags on them? Or new tools or home decor items that sit around collecting dust? It’s time to let them go. Stuff that you never use is stuff that’s taking up space in your life. Sell it to make some money back and to free up your space again. A cluttered home has been shown to increase anxiety, so let that stuff go… literally!
Step 8: Learn a new skill.
Whether it’s picking up a language or upgrading your basic design skills, learning something new is key to moving forward. New skills are things you can bring to the negotiating table when you ask for a raise, or something you can use to land a new job. Learning is also one of the rich habits described by Tom Corley as something that separates rich people from poor people. Keeping learning, hone your skills, and you’ll be doing your career and your bank account a favor.
Step 9: Test your limits.
You need to push for the things that are just out of reach if you want to grow. So try a weeklong spending fast if you’ve never been able to stick to a budget. It’s not forever, but it’s long enough to make you think about your spending.
Trade the $10 cocktail for a $2 sparkling water at the bar for a week. Pushing your limits for short periods of time will remind you that you – not your debit card — are in control.
Step 10: Learn to treat yourself without going overboard.
I think it’s more common to go overboard than it is to maintain balance in our world. We can get THE BEST of everything so easily, and we are constantly bombarded with images, songs and stories of excess.
It’s important to learn how of something special to give yourself without going off the deep end. Too much ice cream makes your stomach hurt; too much spending makes your budget hurt.
Find ways to indulge without breaking your budget. A $30 dinner out once a month probably won’t send you into the red, but a $30 dinner every other day definitely will.
There’s no hard and fast rule to this; you need to test things out and find what works for you.
And when you DO treat yourself, use a round-up service such as Acorns. When you link your debit or credit card to an Acorns account, the service will round up your change to a pre-determined level and invest that difference. How cool is that?!
Why wait to get your money together? Make 2018 the year of being a financial boss!