Millennials are more self-sufficient than any other generation. We grew up with the Internet, we’re not afraid of any form of technology, and really embrace new, progressive ways of doings things. When it comes to managing a Millennials finances, there are a plethora of financial resources out there to make your life easier and much simpler.
Number one on that resource list is online budgeting software. Its utterly remarkable how many Millennials simply don’t use a budget…because they either don’t know how or just don’t think they need one. I’m here to tell you once I started keeping a budget, my finances did a complete 180. We were spending less and saving more. An online budgeting software truly shines a light on glaring financial issues you may be completely unaware of.
For example, my wife and I were spending upwards of $800-900 per month at the grocery store. We had no idea our weekly trips were adding up that significantly. We knew that was way too high for just two of us. We dialed back on the number of organic products and set a budget of $400 per month, or $100 a week. The first month we did this wasn’t really that difficult either. We were a bit more conscious of what we bought and didn’t spend on unnecessary items.
Challenge yourself to come up with a budget and stick to it. You’ll be amazed at what you’re spending monthly at certain places, e.g. eating out, fast food, coffee, bars, clothing, etc.
Mint.com is an online personal finance management and budgeting Website. Mint easily allows you to connect all of your accounts (checking, savings, auto loan, home loan, student loan, credit cards, retirement, etc.) into one easy to use interface. The purpose is to connect all your accounts to track what you are spending (putting out) and earning (bringing in). Many Millennials would be amazed how they are simply spending more than they earn each month.
The first couple months are hard. I’ll fully admit it. You’re off on your budgets and they feel like moving targets. And they are essentially at the beginning while you’re trying to establish a baseline for spending. At the end of the day you simply need to spend less than you earn. Live below your means to establish wealth!
The Vanguard Group is the largest investment management company with more than $3.0 trillion in assets. Vanguard extremely well known for their index fund investing philosophies. I am a HUGE Vanguard advocate! When it comes to financial recommendations, there isn’t a company I would endorse more than Vanguard.
I personally have all my investments held with Vanguard, including my work retirement, as well as my Roth IRA and my wife’s Roth IRA. They’re Website user experience is very intuitive and so easy to use. Setting up an account, establishing a recurring investment, researching funds, etc. is all so easy to do. And the cherry on top is they do truly offer the lowest possible mutual funds and index funds to invest in. Passive investing via index funds is the greatest retirement investing vehicle. Wasting money on expensive, actively managed funds with high expense ratios (e.g. annual management fees) is utterly foolish.
Personal Capital offers free financial tools and calculators to allow you to easily manage your entire financial life in one secure place. When you register with Personal Capital, you’ll have free access to powerful tools plus their award-winning dashboard. The most useful components of Personal Capital are the investment checkup feature and the fund fee analyzer tool. The investment checkup feature analyzes your portfolio and makes asset allocation recommendations for free. Very useful if you still want to manage your portfolio on your own, which I highly recommend because it cuts down on your fees and thereby increases your returns. The fund fee analyzer is just like it sounds…it evaluates all of your mutual funds and tells you just how much you spend on fees and more importantly, how much you may be losing in returns because of your fees. It gives you a baseline to at least hit, if not beat, of one half a perfect (0.50%).