Whether you just graduated college, purchased a new car or maybe bought your first home, chances are you have debt. As millennials work to navigate through the financial ups and downs of independent living, it’s important to have a proactive plan in place to reach your financial goals and be debt-free.
According to recent studies, nearly two-thirds of people confess that they are at least partially to blame for their debt due to poor spending habits, student loans, high-interest credit cards, and personal and medical emergencies. As a result, millennials are left with high balances that continue to grow with additional interest.
Getting out of debt is only half the battle. Staying debt-free is the true challenge! To achieve this, you must understand your financial habits, prioritize your debt, and plan for the future. Here are three tips to get you started on the road to financial freedom:
- Take control of your financial habits. Start by differentiating between needs and wants. See the world for what it is and be realistic about what you can afford versus what you can borrow. While it can be tempting to apply for a new credit card to buy that add-on speaker package for your new car, high-interest credit cards are one of the most common forms of debt among millennials. Analyzing weekly and monthly income and expenses will help identify areas where you can limit spending and improve your saving habits. Understanding your credit options and sticking to a budget can be difficult, but it’s one of the best ways to make a financial plan that is right for you and your future.
- Prioritize your debt. If you’re like most millennials, you probably have student loan debt weighing heavily on your shoulders. And, while it may be the largest loan you have, it doesn’t mean it should be the first one you start chipping away at. Before allocating funds towards your loans, look at your whole financial picture; which loans have the highest interest rates and which ones have flexible repayment options? If you are carrying balances on any credit cards, you may want to consider paying those down first rather than your student loans.
- Talk to people with experience. Surrounding yourself with like-minded people may make the most sense when making weekend plans or catching up on new trends, but to make strides with your financial goals and perspectives it’s best to talk to people that have more financial experience. They may be able to provide better advice on how to negotiate a lower annual percentage rate, improve your credit score, and pay off large loan balances.
We’re here to help! Lakeland Bank offers information on consumer loans, personal banking and financial planning on our website. We also have a team of trusted financial planners to help work through your financial needs and options. Our Customer Service Team can be reached at 866-224-1379.