Monthly Archives: August 2014

Millennials & Money

shutterstock_192796643Achieving financial security before your 30’s

Diverse, tech-savvy and easily distracted are some ways to describe a Millennial, someone born between 1980 and around 2000. This generation experienced 9/11, the wars in Iraq and Afghanistan, and the Columbine and Virginia Tech shootings. But maybe the thing that has shaped this generation and its spending habits would be the 2009 recession. Many of us saw how our families and friends were hit by this recession. Now Millennials are graduating high school, college, starting families and paying off those student loans we knew would come around about six months after college. Maybe you’ve thought about getting your first place, leasing a car, or investing in a mutual fund. Either way, it’s time to start budgeting for your future.

  1. Pay Yourself First

SAVE! SAVE! SAVE! Put the money away before you have the chance to spend it. Open up a savings account at different credit union and have some of your paycheck directly deposited to that account. You won’t even realize the money is gone until you remember once in a while and check the account.

  1. Good Debt v. Bad Debt

Many of us are taught to avoid debt at any cost. But what about when you need to pay for school or when you start looking for a home only to realize you haven’t built any credit for lenders to determine if you’re a good risk. There are two types of debt: the good and the bad. Good debt includes student loans, mortgages and business loans because they typically have lower interest rates and are considered an investment for the future. Bad debt is anything from credit card debt, car loans and personal loans. This debt has higher interest rates and can be prevented with a little smart planning.

  1. Employer Plans

It’s never too early in your career to think about retirement plans. Start putting money into your 401(k) every year. Many companies will match every dollar an employee puts in their 401(k) with around 50 cents. You might not be able to get this season’s sunglasses but you could be able to retire a few years earlier with proper planning. Retirement > Sunglasses

  1. 50/20/30

It’s all about budgeting. The 50/20/30 rule is great because you don’t need a certain salary to maintain it. It’s just an example to follow. Use these percentages to help you budget your lifestyle

  • 50% goes towards essentials like housing, food, transportation and utilities. It may seem high but it gives you room to adjust and keep your budget in check.
  • 20% goes toward your financial obligation such as savings, from retirement to emergency savings, and credit card debt.
  • 30% towards whatever you want; entertainment, cell phone, cable and gym memberships. Anything that isn’t necessary to have will go in this section

These are just a few steps to maintaining financial security for all the Millennials out there. Good luck! To manage all of your finances with BrightStar Credit Union, go to Online Banking and use Money Desktop for all of your account to see where all of your money is going.