Between student loans, car payments and rent, managing personal finances can be an overwhelming task if you’re a millennial. It’s easy to become so burdened with your current financial condition that you forget about planning for your future. However, developing a financial plan to build your nest of wealth is more important than ever. Company pensions are quickly become extinct and Social Security benefits will likely not be as fruitful for this generation.
The good news is time is on your side! So how can you get started? Here are five smart wealth management habits that will help you build a healthy financial foundation.
Develop a Financial Plan
The first step to improve your wealth management habits is creating a customized financial plan that works best for you. A financial advisor can guide you through the process. An advisor will help identify your financial goals, develop an appropriate strategy, implement your financial plan, and monitor your progress on a regular basis.
Create and Maintain an Emergency Stash
Life happens — your car will need a new battery or a pipe in the bathroom will burst. It’s important to create and maintain an emergency fund for when those situations occur. This way, you won’t have to dip into your savings and derail your financial plan.
Build a Budget
Without having a budget in place for everyday life, it’s almost impossible to stay on your path toward building wealth. Sit down with your financial advisor and build a budget that gives a true picture of your expenditures and savings opportunities. There are a variety of saving and budgeting apps you can use to help track spending and stick to your budget.
Take Advantage of Free Money
Company-sponsored retirement plans such as a 401(k) are a great way to make tax-deferred contributions toward your retirement savings. You should consider contributing between 10% and 20% of your income to your 401(k). If you can't afford that much however, contribute what you can. If your employer offers a matching contribution, you should try to contribute enough to take advantage of the match.
Grow Your Money
Millennials are typically more conservative investors, but there are many benefits to investing your money wisely. Having at least 30 years until retirement age means there is more time and opportunity for your money to grow. Talk to your financial advisor about planning a successful investment strategy that can help you establish the lifestyle you want tomorrow.
Update Financial Goals/Objectives
As your life situation changes over time, update your financial goals and objectives. If you experience any changes in income, you should meet with your financial advisor to adjust your plan accordingly. The same holds true as you embark on new life adventures such as getting married, buying a home and having children.
Your community bank is a great resource to learn about wealth management. Our financial advisors can give you new insight and ideas to help you pursue your retirement objectives. For more information or to set up an appointment, visit our website, call 866-224-1379 or visit any of our office locations.
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