Millennials are anxious about their personal finances
Being in your 20’s can be confusing. You’re unsure of your career path, undecided if you want to travel and beginning the transition from college life to the “real world”. To top it all off, being a young adult now opens the door to many confusing money and credit concepts. And many we wish we could grasp sooner, rather than later.
We recently discussed saving solutions and talked about prioritizing self-care and your financial wellness. And we all know that no matter what age we are, it’s detrimental to understand personal finance basics. As someone in our 20’s may think: “I’m not retiring for 40 years, why prepare now?” it’s important to highlight to yourself that preparation is key for a stress-free financial journey. Whether you plan to take out a mortgage and buy a house by 30, finance a car or simply move out from your parents’ home, learning all about personal finance basics will help you achieve these dreams and help you avoid stress.
In a recent study conducted by a personal finance site, NerdWallet found that more than 2 in 5 Gen Zers (41%) feel anxious about their finances. So how can we solve this? Let’s go back to basics and learn about aspects of our personal finances that are not only essentials in your 20’s, but timeless and transferable for your later life.
Master your budget
The dreaded word we all love to ignore but know we need to hear – budgeting. It’s important to master the skill of budgeting while you’re young, so when you’re swimming in bills later in life, you know how to stay on top of everything without ending up deep in debt. If you’re searching for tips on how to start a budget, check out our blog here.
Be credit savvy
According to NerdWallet, 56 percent of Gen Zers (18-23) have applied for a credit card. Yet showing interest in credit, more than a quarter of Gen Zers don’t think young adults need to worry about improving credit. But that’s not true. It’s important to begin increasing your credit score as soon as you can and to be wise when it comes to your credit card.
As soon as you open a credit account and begin using your card, you will soon get a credit score. Your credit score is basically a three-digit number that is calculated from your free credit report in Canada, valuing how “creditworthy” you are. A credit score is ranked from 300 (poor) to 900 (excellent). For Canadians to obtain financial products, your credit score should be 650 or more. But how do you improve this as a 20-something new credit card user?
In order to boost credit in your 20s, it’s important to be credit savvy. When you open your account, you must ensure you pay all credit card bills on time and ensure you’re not living beyond your means. A few factors contribute to how your credit score is calculated, but the longer the credit history, the better. So in order to be credit smart, you must ensure you’re monitoring your score, checking your Transunion and Equifax credit report and do your research. There are plenty of websites online that will not only provide you with your free credit score but will show you exactly what debts to pay and when in order to get the most credit points. You can check out our post on what websites you can use here.
Live on less
Learning to live on less in your 20’s means you’re adapting habits that won’t leave you lacking on money. At times, juggling bills can be stressful. And when you’re younger and may not yet have a mortgage, car loan and other debts to pay, it’s great to spend as little as you can.
This can mean trying to avoid eating out, excessive vacations, subscriptions to too many streaming services i.e.. Disney Plus, Netflix, Spotify etc. This doesn’t mean you’re not allowed to enjoy your money, just trying to encourage smart, thoughtful spending.
Remember, as you get older, you may need to take on more financial strain in order to achieve your goals – so now is the time to spend little, save and prepare for when you need to take on more, so you’re used to living without spending mindlessly.
Insurance is not something we tend to generally think of in our 20s. But it can save you a lot of money. For example, even you think your belongings in your apartment have no value, you should insure them under contents or renter’s insurance. This should also insurance your laptop, television and other valuables are protected under fire or theft.
It only costs around $20 – $30 a month for renter’s insurance. This helps you look after your belongings and prepare for any emergency. Also, it means you aren’t stuck without any of your essentials in case of a freak accident or theft.
Your future is exciting, but it can be unpredictable. If you follow a budget, protect your valuable purchases and become credit sharp, you should be on the way to an exciting financial future. So take a deep breath, plan and be organized – it’s an uncertain journey, but definitely an exciting one.
About Marble Financial Inc. (CSE: MRBL; OTCQB: MRBLF). We are a group of forward-thinking financial technology experts that fully understand the benefits and drawbacks of credit in Canada. Marble helps Canadians improve their confidence to gain access to prime lending. Through our industry-leading proprietary technology solutions: Fast- Track, Score-Up, and Credit-Meds. Since 2016, Marble is proud to have empowered thousands of Canadians to a positive financial future. We continue to establish ourselves as leaders in financial wellness.