How Can Millennials Improve Their Financial Literacy? |
Posted: February 14, 2019 |
Millennials, those born from 1981-1996, are now in a stage of making significant financial decisions. In a time where financial challenges, like with housing and student loans, are more pressing compared to previous generations, millennials may find difficulty in managing money. Because of difficulties with personal finances, millennials are struggling on how to improve financial literacy. Thankfully, there are pieces of advice suitable for this generation, too. Listed below are tips on how you, or any millennial, can enhance money management skills: 1. Think of investment options While it may be difficult to follow investment advice that the previous generation could do easier like owning a home, there are several investment options available for millennials. Investing is crucial because you have a chance to grow your money. The earlier you start investing, the bigger you can gain in the future, whether it’s to add funding for your retirement or to be able to achieve other goals. Invest in real estate if your current financial situation allows you, but invest on something else if you can’t buy a property yet. A few investment options for millennials are:
The foreign exchange market allows you to trade currencies in the hopes that the currency you’re buying and selling is strengthened. This market is somehow different to other markets, so looking for trading information like those offered by EngineForex could help.
A mutual fund is a professionally-managed investment scheme that pools money of investors to purchase various securities like bonds, stocks, cash, and others. This is advantageous for someone who does not have the time, knowledge or resource to build his or her portfolio as someone else is managing it. The risk is relatively low with mutual funds, but the downside is that you have no control over which stocks you’re investing in.
Purchasing stocks is similar to buying shares of a particular company, with the hopes that the value increases over time. In the long run, you can profit by selling shares higher than your purchasing price. While buying stocks is a good way to take advantage of an advancing economy, purchasing stocks in companies that perform poorly can cause you to lose your investment.
Cryptocurrencies, like Bitcoin, have been attracting investors in the past few years. It can be likened to digital money which people can use for exchange. Similar to stock markets, you’ll have to be aware of trends to be successful. 2. Track your spending Another way to improve financial literacy as a millennial is to track your expenses. When you know where your money goes, it’s easier to assess your spending habits, where to cut come costs and find more ways to save. Use the advantage of technology to aid in making and keeping these records. Some ideas to help you track expenses are:
3. Prioritize savings Many millennials may find it difficult to save. The economy isn’t as ideal, recessions happen, and high-paying jobs aren’t as easy to snatch, compared to how they were years before. However, millennials still need to prioritize saving money on top of other financial responsibilities. Here are tips on how you can save money as a millennial:
Final thoughts There are negative stereotypes regarding millennials and finances, but that doesn’t have to be the case. Even in these changing times, it’s certainly possible to improve financial literacy, especially with the help of the tips provided above. Know how to manage your money well so that you’ll have financial freedom, retirement funds, and wealth for the inevitable future.
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