You see your friend or neighbor pull up in their brand new fully loaded SUV and you start wanting what they have. The ability to travel whenever, branded or designer clothing, and the newest wearable technology is desired by almost every millennial but, not every millennial can afford all these things- myself included. What millennials end up doing is letting their emotions control their actions instead of being logical about their spending habits. Because I know what this is like, I've laid out four reasons why we should all do our best to control our emotions and think more logically about our finances.
1. Pay off your debt, don’t put yourself into more debt
When you spend frivolously you more than likely are increasing your debt because you end up having to buy all these luxury items on your credit card that you're not able to pay off at the end of the month. We should be concentrating on paying off your debt not growing it. By saving and putting any extra money towards your college or credit card debt you are taking small steps that will have great returns in the growth of your wealth.
2. You Have the Opportunity for Free Money
Your employer most likely offers a 401(k) with a matching ability, make sure you max out the match. An employer may match 100% of any contribution you make up to a percentage of your salary. This is free money that you should take advantage of. This extra money will give you a great jump-start on saving for retirement.
3. You're able to start an IRA now
If you start saving now, the compounding of your money over the next 35 to 40 years is like magic in my opinion. By investing early you will reap the benefits of the time value of money. When we start investing now that money compounds at interest and grows tremendously over 40 years. Let’s not make our parents’ mistake of waiting to start retiring until it was too late; I know we all dream of being able to travel and do volunteer and charity work, and saving up is really the only way to go about it. Individual Retirement Accounts can help us reach those goals in a more effective way.
4. You Will Find out Who Your True Friends Are
If you are worried about what your friends think of you because you haven’t bought the brand new Apple Watch or Cadillac you will never be happy. By letting go of what others think of you and starting to live within your means by sticking to a budget and creating a realistic savings and investment plan, you will achieve more than your credit indebted friends. And along the way, your true friends who are helping you achieve your dreams will still be around. You may even end up helping your friends by showing them that happiness isn’t found in cars, clothes and technology.
Let us at True Measure be one of those friends who can help you look inward to figure out a plan to achieving your goals. We believe the whole person needs to be taken into account--not just what the numbers say, but what your mind and heart says as well.
If you enjoyed this article about wealth creation, check out "5 Financial Planning Decisions You Won't Regret" to learn more financial tips. For even more tips on how to stay fiscally responsible, subscribe to our blog by clicking the button below for great insights on life and finance!