Make no mistake about it—millennials (those born between 1981 and 1995) and Gen Z-ers (born after 1995) are taking the financial world by storm. But the challenges brought about by the pandemic, coupled with growing concerns about student loans, debts, and strict paycheck-to-paycheck budgets, have put the spotlight on the need to prioritize financial health.
These generations are taking a deeper look at where they are financially and how they can achieve their long-term financial goals despite the challenges.
Even before the COVID-19 crisis, millennials and Gen Z have been known to develop good saving habits as young professionals. A Betterment for business survey released in March 2020 gave a glimpse of how the financially-savvy generations are more concerned about stability in the long run. The survey reveals that about 88% of these young populations set aside a chunk of their monthly salary to save and for their retirement plan.
The age of high-speed technology and instant online access has greatly shaped how millennials and Gen Z-ers view money and how they tackle their finances. Many of them have entrepreneurial mindsets and are not afraid to take risks when it comes to bringing profitable business ideas to life. Most also use the latest digital tools to handle money matters—from staying on top of their budgeting and spending to exploring retirement and investment options.
While we continue to brace for economic uncertainty, there are still many opportunities that the digital natives can take advantage of to make financial milestones. Here are some ways millennials and Gen Z-ers can maximize their savings, build their wealth, and secure their financial future.
Develop Smarter Spending Habits
The younger generations have gone a long way towards being more careful about spending their money. But with the rise of eCommerce and online shopping, more steps can be taken by the millennials and Gen Z-ers to ensure that they become smarter spenders.
One way to be financially smart with installment buying is to use digital tools to score free shipping and seek better deals. It’s awesome to score a bargain, but it can be really harmful to the budget when one is not careful. Before you tackle that shopping list, make sure that you take the time to bargain hunt so that you can put all your savings to good use.
Clearly Define Your Goals and Have a Solid Financial Plan
One way or another, you’ll need to modify your budget as your circumstances change. No matter how complicated it gets, you’ll have to identify your short- and long-term goals and be diligent in your financial planning.
What are your top financial priorities at the moment? Where should you put the majority of your savings? Is it towards life insurance, for your vacation or travel, or putting a down payment on your first car or house? Think about why these goals are important and how they can lead you towards maximum financial flexibility in the future.
Start Investing and Diversify Your Portfolio
It may be daunting to think about how you can grow your money at a faster rate, but there’s no better way to get ahead with investing than starting now. Millennials and Gen Z-ers have the unique power to invest early on to give their money a long time to grow. Among the benefits of investing in the stock market is that it yields the highest returns over time.
But as with any major life decision, you need to do extensive research and be in the know when it comes to investing your hard-earned money. You have easy access to different finance apps and investing tools that allow you to test the market and be hands-on with your personal finances. Start small, set both short- and long-term goals, and explore different investing styles.
When you feel like you already fully understand how to navigate the system, get on with securing your funds by diversifying your portfolio. Not only can this move reduce your risks, but it will also create a snowball effect through compounding that allows you to build considerable finances over time.
Look At the Prospects of Setting Up A Business
Starting a business is no easy feat, but taking risks comes with great rewards.
Millennials and Gen Z-ers have been known to possess several natural characteristics that put them in the best position to start small businesses. These include the expert ability to use technology to realize their ideas, a strong will to juggle multiple commitments and take on extra responsibilities, and the passion for pursuing something they love to do while helping others in the process.
The power of start-ups to drive economic growth is a testament to how millennials and Gen Z-ers have the mental agility, flexibility, skills, and confidence to take on leadership roles and spark new trends in various industries.
Speaking of investing, it is also among the surefire ways for budding business owners to grow their companies. Obtaining the capital to start or grow a business can be pretty tough, but there is a wide array of financing techniques for young entrepreneurs to explore and pursue.
Save and Grow Your Money for the Future
One important thing for millennials and Gen Z-ers to keep in mind always is that while time is on their side, they should take advantage of every opportunity to prepare for life beyond the workforce. The sooner you start building a solid foundation for a financial future, the better off you’ll be.
Yes, there will be unique challenges that you need to overcome, but don’t let your doubts keep you from putting in the hard work. Modern technology and innovative techniques are yours for the taking—use them to your advantage and see how you can benefit more from financial education.
It takes guts, meticulous attention to detail, the right mindset, and a strong dedication to building better financial habits, but it will all pay off in the long run. Keep your eyes on the prize and stay on the journey towards financial freedom.