Plan Your Way to Personal Prosperity
Young adults facing financial concerns benefit from their youth, leaving a lifetime to stabilize their personal finances. Yet despite this privileged position, financial planning remains as important for the millennial generation as it has been for those that have come before. In fact, making the transition to financial independence is more complex than ever, presenting new challenges for millennials to overcome.
Personal financial planning is highly individualized, paving a unique path to each person’s priorities. Despite the differences in individual values and ambitions, however; planners from all walks of life share some of the same common concerns. Even across generations, life’s challenges cause people of all ages, income levels and backgrounds to seek prosperity, comfort, and financial security. Without a comprehensive financial plan, reaching these goals is left to chance.
Whether you are a young person first establishing financial independence or a seasoned money manager tightening-up your financial flow, these planning tips can help you set the stage for success.
Establish Credit Independence
As young people approach adulthood, their financial lives break-off from their parents, establishing independent credit references and relationships. As an essential first phase of personal financial planning, your early years should be spent building and protecting your financial reputation. Effectively managing revolving credit accounts, making timely installment payments, and maintaining good-standing with landlords, creditors, and service providers helps build a solid foundation. Failing to make good on debts and other credit inconsistencies will stay with you, so your early financial success builds a vital base for future monetary stability.
With so many demands pulling at your income, personal savings aren’t always a priority. What’s more, living hand-to-mouth, from paycheck-to-paycheck, doesn’t always yield resources to put away for the future. Even if contributions are small, however; every effort should be made to consistently set-aside savings. If possible, establish automatic withdrawal from your bank deposit, siphoning savings directly from your paycheck. By reserving the cash before it makes its way to your general household spending fund, you’ll carry-on business as usual, without missing the money.
Saving from a young age gives the money time to grow and reinforces good financial practices. Waiting too long to begin building reserves leaves you at a disadvantage later in life, when money is needed to advance your personal financial goals.
Identify Big-Ticket Priorities
Daily financial demands ebb and flow, responding to your immediate needs. But major purchases often cannot be carried-off without preparation. Certain lifetime spending commitments call for pre-planning, so the sooner you get started, the more time you’ll have to pull-together needed resources. Use a well-articulated financial plan to account for these major monetary concerns:
- Education expenses – As your child ages, education costs grow more substantial, ultimately taxing affordability as your kids earn advanced credentials. Even with available help, parents and students face out-of-pocket costs completing degree programs and earning work credentials. Without a plan, your family’s budget could be blindsided by the cost of education.
- Home Ownership – Although it isn’t a priority for everyone, owning a home is a significant financial milestone. Not only does it represent the most substantial thing you’ll ever buy, but owning a home can also benefit your finances, including tax breaks and appreciation in value. You can also use the equity in your home to guarantee financing, giving you access to low-interest loans. If you want to own residential property, don’t waste another minute without a plan.
- Retirement – Even if retirement is in your distant future, planning today provides security once you leave the workforce. Do you have supplemental investments to compliment your pension? Are you making regular contributions to your retirement account? Does your current nest egg match-up with your anticipated retirement needs? Aligning your financial plan with you this important priority ensures vital resources will be available when the money’s most needed.
Financial planning shows nuances from generation to generation, but the fundamentals remain the same. While Millennials operate in a tech-heavy environment unlike conditions experienced by past generations, their financial concerns still include priorities like buying a home, building savings, and preparing for retirement security. Prudent planning lies at the heart of these modern financial successes.
Disclosure: This is a sponsored post.