Only 24% of millennials have basic financial literacy and 8% have high financial literacy, as cited by a CNBC News article. While millennials are better educated than their parents and well-equipped to succeed in the workforce, their lack of financial expertise may have an impact on their ability to attain the financial success they desire. In fact, millennials are accused of putting less value on owning property than buying designer colognes and apparel. If you are part of this demographic, then it may be wise to clean up your personal finances and also learn some critical millennial lessons to live a more comfortable and financially stable lifestyle. Here are some smart financial strategies to borrow from successful millennials.
They Ask Critical Questions
As a general rule, millennials are never afraid to ask questions, and that’s giving them a leg up. With many millennials holding an average debt of about $45,000, mostly due to a large burden of student loans, it’s easy to see why they’re more concerned about asking questions to make sure they’re doing the right thing. Do I really need a 401(k)? How do I handle tax exemptions? How much would a cat/dog cost per year? How do I improve my credit score? How do I sign up for the best credit card? Can I use some of my airline miles? As a millennial, asking more questions increases your financial understanding, which empowers you to make more concrete financial decisions. This will, in turn, help you better manage your financial lifestyle.
They Use Debit and Automation to Stay in Control
Although millennials are spending more, a large number of them prefer using debit cards instead of credit cards for one main reason – with debit, they’re in control. According to a recent report by Visa, up to 28% of millennials opt for debit card payments for their lifestyle expenses, and this is a growing trend that’s expected to continue. Many millennials know what it’s like to deal with thousands of credit card debt hangover, and are trying their best to work through their options. They are also leaning more towards automation to manage their money. For instance, many of them are automating their savings which allow them to “set and forget it”. Taking such steps is a great way to stabilize your finances so you can achieve your goals.
They’re Joining Financial Groups
Millennials are more conscious consumers and are twice as likely as the rest of the population to use their smartphones to do price comparisons and find reviews while shopping. But this is not enough to ensure a stable financial lifestyle. More consumers are joining financial-related groups to gain knowledge to understand personal finance. There is no doubt that social media and other millennial-friendly online communities have led to a proliferation of real-world and virtual spaces where they can support each other’s financial decisions, successes and struggles. Millennials are discussing everything from investment ideas, getting educated and finding the right financial adviser. By looking for a community, getting educated and sharing advice, you can learn so much more about improving your finances.
The good news is, millennials aren’t overconfident and rarely assume they know the best thing to do without doing extensive research on it. Instead, they ask questions, spend more time making sure their investments are set up to meet their specific goals, do more comparison shopping before spending their money, seek personal finance advice, consider automation as a better option and look forward to new lifestyle changes in a more conservative way. Use some of these proven tips by successful millennials to manage your aspirational millennial lifestyle.