If you're new to banking, it can feel like an old person's game. You hardly ever see 20-somethings discussing finance on TV. However, once you dive into the world of finance, you'll find banks are eager to accept millennials into their world. Lots of services are geared specifically toward younger consumers. You just have to know what to look for.
Here are a few tips to jumpstart your financial life.
Start saving right now (start investing, too)
Let's get this one out of the way, because you've probably heard it a million times. But according to this study, that one, and this other one, many of you aren't listening. So here it is one more time: you need to start saving, and you need to start saving right now. If you don't have anything saved, you should try to get your savings started today, even if that just means opening up a savings account and putting $10 in it.
There are lots of different ways to save, and in a perfect world you'd have the ability to try all of them. On the basic side of the spectrum, it's as easy as transferring money into any account that's not your checking account. If nothing else, this will help reduce your temptation to spend your whole paycheck right away. Try to build up an emergency fund in your savings account. A common savings goal is to stow away enough to live on for a few months.
You can also save in a retirement account or an investment account. These are popular places to keep your savings because they'll grow much more over time compared to a basic bank account. The money grows more drastically the longer it sits in an account, so if you start investing at a young age, you can maximize the amount that your money works for you. You'll be even less tempted to touch your money too early if it's in a retirement account because tax incentives will save you a lot of money if you wait to make withdrawals until your older years (the exact age depends on the retirement plan). If you might need to tap into those savings in a couple years rather than a couple decades, you can put that money in a low-risk investment portfolio or high-interest savings account.
When a bank makes an app, it assumes a sizable chunk of its users will be millennials. Banks assume millennials can keep up with the latest technology, the sleekest interfaces and the most seamless integration into our daily lives (for instance, how far away is your phone right now?). They pack all the latest services into apps that are designed to be easy for us to use.
Banking apps are a great introduction to the financial world. The apps allow users to explore their financial profile wherever it's most convenient. Use these apps to develop better financial habits, like checking your account balances more often.
Budgeting apps help the financially immature get their affairs in order. Apps like "You Need A Budget" specialize in helping users reduce their debt, but you don't have to be in economic peril to benefit from them. Budgeting apps can help anyone get a better sense of how much they're spending every week versus how much they're earning. An established budget helps maximize savings every month, and it minimizes wasteful spending.
Investment apps are popular with millennials, and for good reason. They're the easiest way to start investing. Apps like Acorns and Wealthsimple do all the investing for you, based on your answers to basic questions like "How risky do you want to be?" and
They also make it easy to get in the habit of investing by linking to your credit or debit card and rounding up the spare change from every purchase. You'll be investing without even thinking about it. For those who want more control, apps like Robinhood and Stash let you pick individual stocks and ETFs to invest in.
How long do you plan on waiting before dipping into the money in this account?
Automate as much as you can
Technology has made it easy to automate many aspects of our financial lives, and you should take advantage of that. Set up autopay for as many bills as you can. Set up automatic account alerts that let you know when your money's running low or when there is suspicious activity on your account. These automated features help you build good credit by ensuring you'll never miss a bill payment and that you catch any fraudulent activity right away.
As discussed above, automated investments build up your investment portfolio without taking too much brain power. Investing can be fun, but if you don't have the interest or time for it, set up an automated investment account that will do it all for you.
Follow your financial institutions
Use any social media accounts you have to follow your bank, your apps, and the companies you invest in. Instead of having to check the company website for news and updates, you'll have the news delivered right to your feed. You may also get tipped off to special promos and exclusive offers that you'll only find by following the bank's social media page.
You should also sign up for email lists with your financial institutions, and opt for e-delivery of account statements. Not only does that cut down on paper waste, it also digitally stores all your important financial notification in your email inbox. If you need to revisit any account statements, bill amounts, or bank announcements, just do a quick inbox search and those documents will come right up.
The best tip for beginners is to simply start caring about your financial life. If you've done that, the hardest part is out of the way. Now let your curiosity be your guide, and explore all that the financial world has to offer.