Money management is like dieting; we know what we have to do, we just have to follow through and stick to the plan.
“This is Benjamin,” went the tagline for “The Graduate.” “He’s a little worried about his future.” Today’s Millennials are more optimistic, Spectrem Group research finds. Across all wealth levels, young adults are more likely than Baby Boomers to report that their financial situation is better than it was one year ago, and that they expect their personal financial situation will be stronger in 12 months’ time.
The challenge for members of the college class of 2016 entering the so-called real world will be to adopt, implement and maintain money habits to make this possible. It can be challenging to go from a cloistered campus lifestyle to your own apartment and into the workplace. Rent; utilities, transportation, groceries; it’s all on you now.
In one respect, money management is like dieting; we know what we have to do, we just have to follow through and stick to the plan. And that’s the first think experts advise young graduates venturing out on their own: Make a plan, a specific budget that takes into account your expenses each month. Free money management apps such as Mint have helped tech-savvy Millennials who have never known a day in their lives without the Internet get their financial house in order, check their account balances and track their saving and spending.
As to spending; watch it. Experts point out that when living on one’s own, it quickly becomes apparent what heretofore “essential” items can become inessential, such as daily premium coffee runs. They also recommend looking into alternatives for discretionary expenses you may take for granted. For example, On Demand services such as Hulu, Netflix and HBO Go might be a better fit for your budget than premium cable. Cooking in is much more economic than eating out. When you do eat out, do some research as to which of your favorite haunts have special “happy hour” specials (on food). From there, it’s relatively easy to navigate the big-spending decision such as whether you really need a new car or big screen TV.
Need financial advice? Preferably for free and by those who have been or who are going through what you are? There are many age-targeted financial blogs from which Millennials could benefit, including Wise Bread, Money Under Thirty, How to Get Out of Debt, and the Penny Hoarder.
One of the most important things young adults just starting their careers must do, experts encourage, is to start saving for retirement through employer-sponsored plans. Make it automatic through direct deposit. Start modestly in you must, but start. It is also recommended contributing to an emergency fund to help meet unexpected expenses. .
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.