With mounting student debt, rising housing costs, and waves of layoffs in many industries, the American Dream seems like a far reach for a number of millennials — and the prospect of retirement is a scary situation for some.
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“Thirty-eight percent of early millennials born in the 1980s will have inadequate age-70 income, compared with 28 percent of preboomers (born between 1937 and 1945) and 30 percent of late boomers (born between 1955 and 1964),” a 2022 Urban Institute study indicated. The study also stated: “The possibility that Social Security’s long-term financing gap could lead to future benefit cuts further clouds millennials’ retirement outlook.”
While it’s a gloomy time for millennials, the good news is they have time to catch up and grow their wealth. Here are three ways to help improve your financial health as a millennial.
Pay Off Credit Card Debt
One mishap can cause financial hardship — and it’s easy to rack up credit card debt, but hard to pay it off given the high interest rates. There’s a variety of ways to tackle debt, but one option is transferring what you owe on credit cards to a balance transfer card (one with little to no interest attached). Just watch out for the transfer fees. It’s typically a percentage of the amount you’re rolling over.
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Build a Savings With the Right Account
Having an emergency savings fund large enough to cover three to six months of living expenses is always recommended, but so is having money set aside for things like a car, a down payment for a house, etc. The type of savings account you have matters. A high-yield savings account pays a high annual percentage and is a good option to grow your savings.
“Right now, with the interest rates that pay in… a high-yield savings account can be a really great, safe opportunity for growing those savings,” Sue Gardiner, certified financial planner and owner of South County Wealth Planning, told CNBC earlier this year.
Save for Retirement
It’s hard to save for retirement when you can’t afford rent and other basic needs, but even just putting away $100 a month is a start. Millennials still have some time before they enter their golden years, so the sooner they save, the better off they’ll be in the future.
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This article originally appeared on GOBankingRates.com: 3 Proven Ways To Improve Your Financial Health as a Millennial
