Millennials and Money: 3 Tips for Acing Real-World Finances

BeckyWalenWebBy: Becky Walen, Senior Wealth Management Advisor, Bell State Bank & Trust

Congratulations! You are now a college graduate. Are you nervous? Excited? Scared? You have probably just answered yes to all three questions, and that’s OK. You’re most likely looking to start a career, earn your first significant paycheck, find a new place to live, and more.

But, you might also be weighed down with a lot of heavy financial issues: paying down student loan debt, saving up money to rent or buy a place to live, figuring out how to manage your own finances, and determining how to do all of this while starting to set aside money for retirement.

Here are three tips to financial success that will make it all simpler.

1. Your Financial Priorities

You have a lot going on right now. The best thing to do is take a deep breath, relax, and plan. Start by determining your financial priorities. Focus on the following:
• Build an emergency savings fund of three to six months living expenses.
• Pay down your highest-interest rate debt.
• Repay your student loans.
• Balance debt repayment with saving for retirement.

2. Save What You Can for Retirement and Future Needs

If You Already Have a Job:
If you’re earning an income from full-time work, it’s time to start contributing to your retirement accounts and investing some of your savings. It’s never too early to start, because time is your biggest advantage as an investor.

The earlier you begin, the more your nest egg will eventually be worth. Even if it’s just $50 or $100 per month right now, contribute what you can to your retirement and emergency savings accounts to help you cover future needs and expenses.

Many companies offer a 401(k) plan where they will match a percentage of funds being contributed into your 401(k) account. If a company is willing to match 5% of funds, you should contribute at least 5% into the account. It is wise to take advantage of this “free money” opportunity. For example, if you make $35,000 per year and save 5%, you’ll contribute $1,750 to your 401(k). If your employer matches that 5%, you’ll have $3,500.

If You Are on the Job Hunt:
It may seem early to talk about retirement, but it’s not. The sooner you start saving, the better. As long as you have some earned income, you can set up an individual retirement account (IRA) before landing a job that offers a 401(k) plan. IRAs help you plan for a secure stream of retirement income.

3. Live Smartly to Aggressively Pay Down Debt

Make sure your spending is in line with your priorities and your values. You work hard for your money, so be mindful of what you spend it on.

Once you’ve realized you don’t have to spend every cent you make, you should have money to allocate toward your debt. The sooner these big debts are gone, the sooner you’ll be more financially stable and secure. The longer you hang on to debt, the longer you’ll be unable to advance other financial goals and the more money you’ll be paying in interest.

We Can Help

Bell State Bank & Trust’s wealth management division is here to help you. When you place your trust in us, you draw on collective decades of experience in managing investments and helping you plan for a secure future and retirement income.

Call us at 701-451-3000 to start the conversation!

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