Five Things Millennials SHOULD do with Money
Millennials are a group that ranges from all different ages, but for the purpose of this article, we are going to focus on the millennials that fall between the ages of 18-25. This group of young adults has recently been reported to have less than $1,000.00 in their bank accounts, on average, and while this article will not discuss what they should be doing to save money we will be focusing on things they should be using their money for.
1. The bank is not your friend. Most millennials, that do save their money, think that putting it in the bank is the best thing to do to save money. If you really think about it, they're not wrong, but the purpose of making money is not just to save it, spend it frivolously, or let it collect dust it is to use it. Putting your money in the bank is useless, yes you are saving it, but it is not doing anything with the proper systems you could be making returns of your money and having it grow not just sit there. Take your money and open an account with a firm that will invest your money, and have them do the heavy lifting for you. Many of them will give you a few free consultations and advise you on different funds to put the money, but for a small fee many of them will take it one step further and do the investing on your behalf.
2. Open a small business. This idea is a little tricky, but with the proper help could reap you huge returns. Whether it is a brick and mortar location or an online store putting your money to work for you in a small business is a sound investment. You can either start a website where you make or sell products, a buy cheap sell high website or a dropshipping website. Any of these requires a certain level of work, but with the proper dedication can grow quickly and turn a profit fast. (For tips on opening, running, and working a small business read our Entrepreneurship section, or email us your custom questions).
3. Invest in your education. This is by far one of the best things you could do with your money, and sometimes it can even be free. Taking a course at a community college, online, or at your local University can expose you to new kinds of thinkers and people. These ideas, people, and courses will allow you to expand your mind and ideas and in turn gives you the tools you need to make even more money. Buying a book every two weeks or every month can help to improve your skills and over time you can become an expert in your field with this knowledge.
4. Retirement Funds. This one may seem a little far for most people, but the truth is that retirement is going to cost more and more especially depending on the city that you live in. If you start a retirement fund with an IRA or your companies 401(K) you can save money with great tax benefits and start preparing for the future.
5. Save 15% of your paycheck. This idea is a little bit at odds with the first point that we gave you, but at the same time very different. Instead of spending all your money on retirement, investments, businesses, or anything else we also recommend that 15% of your annual paycheck be saved some way. Instead of a checking account put your money into a CD account. This account is like a saving account but provides a better interest rate of maturity, and also restricts access to your funds for a certain period of time. Unlike a saving account this restricted use will stop you from "dipping in" or "needing it for a good reason," and at the same time give you a higher interest rate than your common saving bank account.
Money is a touchy subject for a lot of people and while we believe these are all a good idea we remind our readers to consult their local financial specialists to make sure that these strategies are right for you. Remember when it comes to money one size does not fit all, but at the same time certain things have been proven to make you money and bring a steady return. We recomend talking to your local financial investment bankers and start spending your money properly.