Millennials have to face a diverse set of challenges throughout their life, with one of the biggest being the transition to adulthood. For many, student loans and getting a job are the most of their worries, and some fear managing their financial lives effectively. Whether you are a millennial several years in your working life or someone who has graduated university over the past couple of years, it is essential you devise a budget. Managing your money well will stand you in good stead for a secure financial future. Here are some tips on how you can get started:
Take everything into account
Before you begin devising a budget, look at your account as a whole and calculate what you can afford to spend next to your income. If you find that you aren’t bringing in enough money from work and that you need more money in order to live, then you may need to consider looking for a new role. Have a look into social networking websites like LinkedIn to liaise with people in your industry and connect with people new opportunities. If the job market in the area you are living in is particularly weak, then relocating to a major city may greet you with stronger prospects.
Budget-readiness also involves having a savings account in place or even considering avenues of investment. Property investment is a great avenue to discover as it has the potential to maximise your monthly income significantly. Companies like RW Invest offer properties with rental returns up to 7%, this is estimated to bring in a secondary income of around £9600 in two years. Using properties as a way of boosting your income is a reliable tactic, although you must ensure you use a reputable company that is on hand to assist you should you require it.
Create Budget and perfect your plan
Start by adding together all of your monthly income from your employer, then take into account any other sources of funds such as bonds, inheritances or investments. Then you should go on to calculate a total sum of your monthly expenses. Don’t forget to include any debt you have like any student loan repayments, as well as living expenses like mortgage, rent and utility bills. You should also factor in eating out and commuting to work or university. Subtract all these expenses from your income to see what you have to play with each month. If you exceed your income, then you need to identify ways in which you can make cuts.
Once you have worked out your income and outgoings each month, you should aim to refine your budget. Of course, make sure all your finances are paid and up to date, and remember to put a certain amount to one side for savings. After that, it may be worth it to consider the 50/30/20 rule of budgeting. This rule is one of the most effective ways to organise your finances, and it works by organising your money into three main categories. Limit your needs to 50%, your wants to 30% and your savings to 20%. Choosing a financial plan isn’t necessarily about saving money, it is about prioritising and organising your spending, so you can still enjoy life without having to worry too much about finances.