The new year typically encourages millennials to change old habits and aspire to be a better version of themselves. You’ll often hear resolutions to get physically fit, save money or a plethora of other financially driven New Year’s resolutions in order to lead a more balanced lifestyle in 2016.
But some millennials need help achieving their 2016 financial goals. A 2015 Millennial Money Mindset Report, led by iQuantifi in partnership with Middle Tennessee State University, found that 41% of millennials said that in the next three to five years, their goal is to “Increase my overall level of savings.” The problem is that millennials carry an average debt of $47,689, according to the report.
To make sure millennials have a viable chance at accomplishing their financial goals next year, GOBankingRates interviewed the best money experts of 2015 to get their most important money tips that millennials can use today.
1. Make Your Dollar Do Pilates
Nicole Lapin, the author of Rich Bitch, a financial guide for young professional women, explained the different ways you can stretch your dollar and save money.
“Go on a spending freeze with your partner, colleagues or best friends,” she said. “Create a support system, and help each other. And, of course, make it fun!”
For example, “instead of having a girls’ night out at that new bar on Friday night for $12 cocktails, have an even better girls’ night in,” said Lapin. “Eight-dollar wine from Trader Joe’s, some snacks and some good company go a long way.”
Or instead of going on a shopping spree with your friends, “have a clothing swap where you shop in each other’s closets; one woman’s trash is another woman’s come-up.”
2. A Plan B Is Absolutely Necessary
Your financial situation can spiral out of control when you’re taking reactionary steps to handle money problems. Robert Kiyosaki, the best-selling author of the Rich Dad, Poor Dad personal finance book, explained why millennials can never be too prepared when planning their finances:
“Having contingency plans makes us feel less vulnerable and exposed if we find ourselves facing a setback. This preparation would include cash reserves, in the event of job loss or a decrease in income, as well as a Plan B. That Plan B could be a part-time business that supplements income from a full-time job to help create a cushion in the event of unplanned expenses or any type of financial setback,”
Kiyosaki is not the only one who believes in the value of financial planning. Chris Hogan, a former all-American football player and now personal finance guru, said, “The best thing you can do for your finances is to create a plan. Think about what your financial goals are, and create a plan to reach those goals. The necessity of a plan sounds simple, but it is the one thing that many people overlook when it comes to their money. And a dream without a plan is simply a wish.”
3. Don’t Get Stuck In A Dead-End Job
You probably spend 40 hours a week at your full-time job. But if your job won’t take you where you want to be next year, stop wasting your time.
“My No. 1 tip for Americans as we approach 2016 is if you are in a job you aren’t completely satisfied with, shop the market,” said Clark Howard, host of The Clark Howard Show and New York Times best-selling author. “If your employer is being cheap about giving raises, there are tons of companies out there that are offering great opportunities right now. So shop yourself in the market, and find a better job that’s better for you and your family.”
With 57% of millennials surveyed in the Millennial Money Mindset Report stating their biggest financial challenge is not making enough money, the new year is the best time to avoid complacency and take proactive measures to ensure you can save money and reach your goals.
4. Quit Being Passive About Your Money
Being proactive also requires millennials to stop feigning innocence and acting like they don’t control how their money is spent.
Dave Ramsey, host of The Dave Ramsey Show and author of countless best-selling personal finance books, got straight to the point when asked for his No. 1 money tip for the new year.
“Tell your money what to do, instead of wondering where it went,” he said. “People know what they need to do with their money, but they just don’t do it. Be proactive with your money — do a budget, get rid of debt and save.”
5. Change Your Perspective
Your parents, childhood coaches, counselors and possibly even friends have likely preached the mantra, “the glass is half full” during your lifetime. But this mantra can help you with your financial goals by making you see the positive in a seemingly negative situation.
Jeanette Pavini, couponing expert at Coupons.com, explained that a simple mental shift can help millennials reach their goals next year. “Remember that you have the power to give yourself a raise,” she said. “That’s because spending less can be like making more. Get rid of the $150 a month cable bill, and it’s like giving yourself an $1,800 after-tax raise.”
6. Invest in Yourself
Josh Felber, entrepreneur and GOBankingRates’ 2014 Best Money Expert winner, said millennials who want to get out of debt should “take action, start investing in yourself to grow and obtain the knowledge to start a business. Add multiple streams of income, and make sure your financial output is not more than your intake.”
7. Tap Into Tech Tools
If traditional bank accounts and setting aside dedicated savings under the mattress isn’t your style, turn to websites and mobile apps to help you make smarter, money-saving decisions.Kyle Taylor, personal finance expert from ThePennyHoarder.com, suggested using apps to take advantage of discounts and coupons at popular grocery stores, like Kroger and Whole Foods.
“We all know about couponing, but saving money is way easier when you know how to stack discounts,” said Taylor. His strategy?
“The first thing I do is buy discounted gift cards on sites like Raise.com — you’ll find them for Kroger, Whole Foods, Target and a bunch of other grocery stores. These gift cards are sold for 1-25% below face value, meaning that I’ve saved money before ever stepping into the grocery store. I stack those savings on top of my regular coupons and then combine it with grocery rebates from apps like Ibotta and Checkout51. Utilizing an all-of-the-above strategy has helped me reduce my grocery bill by more than half.”
This is a straightforward way for starving college students — or even hard-working, young professionals — to cut back on this costly monthly expense.
8. Emergency Saving Is Priority No. 1
According to the Millennial Money Mindset Report, 68% of millennials said their primary goal in the next five years was to “save for a vacation.” If you have the same goal, best-selling author, analyst and innovator Whitney Johnson said your priorities might be misguided.
“No matter how much money you are currently earning, save for a rainy day,” said Johnson. “At least six months’ [worth] of what you spend monthly [should be] in the bank. Period.”
While saving for your dream vacation will undoubtedly bring you immediate gratification, an emergency fund is a pivotal tool to help you survive through financial obstacles that might pop up in 2016.
9. Never Lose Money — You Can’t Afford It
“As we head into 2016, one thing is guaranteed: We don’t know what’s going to happen, and chances are that we may even be wrong,” said Tony Robbins, a New York Times best-selling author and entrepreneur. His No. 1 core principle — whether you’re investing money or simply working through the best way to manage your money — is to avoid losing money.
“The single most important rule of investing is simple — do not lose money,” he said. “While so many of us are focused on making money, the most successful investors on the planet are obsessed with not losing it. Even some of the greatest business people, like Sir Richard Branson, abide by this principle.”
Millennials should be focused on how to never lose money. With 30% of millennials’ total annual household income at “less than $25,000,” according to the Millennial Money Mindset Report, Gen Y simply can’t afford to.
10. Money Is Just The Beginning
You might have successfully amassed a decently sized savings. But if the environment you’re in isn’t right, you still might not be able to achieve your ultimate goal. Tim Ferriss, investment and money expert, said, “The lifestyle value of each dollar you have is determined by your control of two other currencies: time and mobility.”
Without a solid understanding of when the timing is right, the amount of time you have to work toward a goal or the ability to act on that goal within your defined time period, you’re essentially unable to make any moves to become successful.
It’s unreasonable to put all of the above money tips into action as soon as Jan. 1, but taking steps to commit to even one change for the new year puts you on the right trajectory to weather financial challenges in 2016.
I write about saving money and consumer spending.