Nine Financial Decisions Millennials Need to Make Right Now

What Are You Doing with Your Paycheck?

A large portion of the Millennials has now entered the workforce. And many are now looking at their paychecks and wondering, “Now what? What do I do with my money?” Millennials have some very important decisions to make that will dramatically alter their financial future.

Here are 9 financial decisions that Millennials need to make right now:

1. Decide to live within your means.

It starts here. This is the key to accomplishing any of your financial goals. Stop considering the number on your paycheck as the amount you are able to spend. Living paycheck-to-paycheck ensures that you will have financial troubles in the present and future.

2. Decide to give.

Commit to give away a percentage of every paycheck. This means that as your paycheck increases, so does the amount you give away. There are many great reasons to give, one of which is that God tells us to do so in the Bible. Where do you start? I think donating 10% of your gross (before taxes) income to your local church is a great place to start.

3. Decide to have an emergency fund.

You never know what will happen in the future. Set aside at least 6 months of living expenses in a savings account. This will give you a cushion when an unforeseen, costly event occurs.

4. Decide to stop carrying credit card balances.

Carrying credit card balances is incredibly costly. There are few places where you could end up paying more for a balance than a credit card. Let’s assume that you carry an average of $10,000 on your credit cards. If you interest rate is an unexceptional 20%, you will end up paying $2,000 over a year just to carry that balance. You spend $2,000 for nothing.

5. Decide to pay off debt quickly.

Do you want financial freedom later in life? Get aggressive about paying off debt, including your mortgage. Start with whatever balances have the highest interest rates. These are typically your credit cards.

6. Decide to save for retirement.

If you are not setting aside money for retirement, you are missing a huge opportunity. Retirement savings works best over many years. If your organization allows you to put money into a retirement plan like a 401(k) or 403(b), take advantage of it. Even if you are only able to set aside 1% of your gross income, start now. It may feel so far off that the priority does not seem very high, ,but your future self will be grateful if you start acting now.

Be financially disciplined now so that you can experience financial freedom later.

7. Decide not to waste money unnecessarily on depreciating assets.

A depreciating asset is any item whereby its value is reduced over time. For Millennials, one of the most common unnecessary spending on a depreciating asset occurs with their car. There is nothing wrong with a nice car, if you can afford it. But many Millennials overindulge and end up spending excessive amounts of money on cars. And when they sell it, most of the money will not be recouped.

8. Decide what you would like to provide your kids.

Do you want to pay for your kids’ college? Do you want to buy them their first car? For many, these dreams will not be possible because of a lack of planning. Start setting aside money for these large expenditures now while the kids are still in diapers.

9. Decide to leverage time.

For your financial goals, the value of long-term discipline cannot be overstated. Right now, you have time. But it will go quickly. In a blink of an eye, your kids will be going to college, and you will be facing retirement. These moments do not have to be a financially stressful time for you. Be financially disciplined now so that you can experience financial freedom later.

What about you? What are some of you personal financial successes or mistakes? Please place your comments in the section below.

Should I opt out of Social Security? How much housing allowance do I take? Do I have enough for retirement? Should I ask for a raise? Why should I even care about my financial picture? The Minister’s Salary was written to shed light on some of the issues that seem to most burden ministers. With simplicity and clarity, it provides a holistic look at key financial issues. The Minister’s Salary is an excellent, concise resource for anyone seeking answers to some of the most common financial questions asked by ministers. Now available!

How the Mismanagement of Personal Finances Creates Poor Leaders

Please note: I reserve the right to delete comments that are offensive or off-topic.

Leave a Reply

Your email address will not be published. Required fields are marked *

4 thoughts on “Nine Financial Decisions Millennials Need to Make Right Now

  1. This was such a great reminder for our generation. A huge thing that helped me was starting off young getting a job working and putting money away into a savings. I had wonderful parents that helped support me, even some throughout college, but despite that I still began a part time job at age 15. I made sacrifices in college to not do quite as much “fun” to maintain a steady job,
    or I chose to study while I watched a movie with friends at times. I still had a wonderful social life though, I maintained leadership in the Baptist Collegiate Ministry and extra curriculars, but all the while I worked 20-40 hours a week. This has made all the difference now that I just graduated and am soon to be married. That extra money that I saved, and also my fiancé who lived similarly have allowed us to go into marriage and into the work force debt free and even with a nice honeymoon that hasn’t been stressful to pay for. Not only did that give us the financial ability to be on our own and married, it gave me the work experience to gain a better job right out of college. I must say the extra sleep or the more movies I could have watched with friends were such a great exchange for the ability to enter this next stage of life without the financial burden of the last. Overall students in college or high school whether scholarships or their parents are able to cover the major expenses of life- gaining the appreciation of the dollar and the responsibility of budgeting, paying your own bills, and beginning to save some money at a young age makes all the difference when it is no longer a choice but a necessity.