Building wealth and savings is important to ensure that when emergencies happen, there is enough financial reserves to act as a safety net. Millennials often are strapped with debt in the form of student loans, and these monthly loan payments can make accumulating savings difficult.

Saving money and investing at a younger age, though, means you have the time to slowly accumulate financial security. But beginning can be the difficult part. Establishing savings and/or investments means researching options and setting a plan of action. But the beginning also requires an understanding of the big financial picture in the form of a budget.

So if you’re fresh out of college and have secured that amazing corporate career or dream job, here are a few tips in making good financial choices to help build savings and wealth.

Research Financial Advisers/Planners

Some individuals set a big-picture lifetime goal for savings and retirement. Maybe they’ve read that they need a million (or two…or more) to retire comfortably and so this is where they set the financial bar. While this is great for goal setting, no one should expect that saving a million is going to happen overnight. Or within a year (although, never say never). A big goal is reached over time—decades, perhaps. Ideally, you should start saving money for retirement in your twenties; the longer you wait, the harder it may be to hit your financial goal. Once you have an idea about how much you need to set aside for retirement–or that nest egg–you can begin to take action.

A financial advisor/planner can help you figure out how much you need to save during your working years. But how do you find a reputable financial advisor?

You can talk to or meet with multiple prospects to help find the person who best meets your needs and meshes with your own personality. You want to find an advisor whom you trust and feel comfortable talking to when you have questions and concerns. Remember, you need to be able to trust this person with your money…so take your time in researching your options.

Once you’ve found a financial planner, then you can discuss how to best meet your goals. Your financial planner can advise you on how much to save and where/how to invest to grow wealth and hit your retirement/savings goals.

A millenial couple

Going Solo: How to Take the Reins of Your Own Finances

Some individuals decide that they will be the masters of their own financial fate. This is fine, too…really, how you manage your wealth/savings is a personal decision. If you’re going to try to build savings without help, though, you need to figure out a game plan.

First, you’ll need to review your budget. If you don’t have a budget, you’ll need to create one. The best way to find out how to save money is to assess how much money you reasonably can save each month. The only way to do that is to figure out your monthly income and expenses. If your monthly expenses exceed your income, you might have a spending issue. In this situation, you’ll need to figure out what expenses you can cut from the budget to help free up cash flow. In order to save or invest, you need to have leftover income to allocate towards savings and wealth.

Some easy items to cut from the budget include:

  • Cable or streaming services
  • Pricey haircuts or spa days (manicures, pedicures, facials, etc.)
  • Dining out (cook at home instead!)
  • Entertainment costs (like the movie theater)
  • Gym fees (try working out at home)

So what do you do with the cash you free up each month? The answer is dependent on a lot of variables, including your own financial comfort level and how much cash you must allocate monthly for savings/investing.

Your options include, but are not limited to:

  • Placing your monthly surplus into a savings account
  • Investing in stocks or bonds (you’ll need to research your options!)
  • Purchasing assets (like a home that will build equity)
  • Starting a 401K through your employer (find out if your company will match your contribution)

There is no right or wrong option. Again, how you invest or save should be in line with your own goals; your comfort level is important, too. Some people feel anxious about the volatility of the stock market. Others are fine taking risks. Weigh your options and do what is right for your individual situation. If an option makes you uneasy or anxious, then it might not be right for you.
Piggy bank, calculator, money, and millenials making wise financial decisions

Think Outside the Piggy Bank When the Budget is Busted

Some budgets are just incredibly tight. Millennials often are strapped with college debt, and this can make saving even more difficult. According to U.S. News & World Report, 20 percent of each paycheck should be saved. However, those struggling may find this goal out of reach. So if you’ve cut everything, but you still can’t stash money away for a rainy day, here are a few ways to make more money to meet a financial goal:

  • Freelance as a side gig (just be sure your employer is ok with this)
  • Get a weekend job (you may even become a rideshare driver)
  • Sell some unwanted items (like clothes to a consignment store)

One of the easiest ways to save, though, is by always allocating all (or at least part of a) tax refund toward that savings goal. Instead of using that refund for a vacation or luxury, save it or use it to pay down high-interest credit cards or loans.

Get Out of the Debt Spin Cycle

One of the worst financial habits that can lead to trouble is constantly using credit cards without paying down the balance. Revolving debt can be a vicious cycle. If your credit card has a high interest rate, then focus on paying down that balance. But do NOT use the card to accumulate more debt. Credit cards should be used for emergencies, the convenience of using a credit card, and specific card benefits, not to support a lifestyle that you cannot afford. The best way to use credit cards is to make a few monthly charges (like gas) and then pay the balance off completely each month.

If you can’t afford to pay off that purchase at the end of the month, then you need to ask yourself if you really need it. The exception to this rule? True emergencies, like car repairs or necessary home repairs (like fixing a faulty HVAC in the winter, etc.).

Reassess Your Financial Situation Regularly

As you slowly accumulate savings for a rainy day fund or invest the money in other ways, you may want to look at other ways to further grow wealth. Maybe you’ve stashed enough money to use as a down payment for a home. Or perhaps you just want to keep on the same financial path.

You don’t have to keep your savings habits the same through the years. However, if you’re looking for ways to increase already existing savings and wealth, then it may be time to investigate a financial advisor/planner. Some individuals/families are comfortable holding the course, though, and, again, this is a personal choice. Every financial situation is different. Do what works for you, your family and your financial goals.

But ALWAYS Have a Plan

No matter how you choose to save and/or invest, start as early as you can to ensure that you can best meet your own financial goals. The earlier you begin to save for retirement or for emergencies, the better. If you wait too long, then meeting those big goals can lead to stress.

When you start early, you can save a little at a time. Even if the amount you can save is small, as you progress in life and your career, the more you may be able to allocate to savings, a 401K, investments or even your child’s college savings.

Of course, the first step to any financial savings goal is to understand your budget. You can’t save or allocate savings if you don’t know how much is left over each month. And if you don’t even have a budget surplus to stash away, then savings may be difficult. Review your expenses, and if they exceed your monthly income then make a plan to cut out unnecessary costs.

Again, some individuals may zero out each month even after cutting out unnecessary expenses.

In that case, taking on a second job or finding other ways to increase your income might be necessary. Paying down high interest loans and credit cards also can help pave the way to free up more money each month. Lowering those balances may help lower monthly payments. Just be cautious about managing credit card expenses to avoid increasing the debt load.

Building savings and wealth isn’t one-size-fits-all. There are many options out there for millennials, but the earlier you save/invest the better. Research your options, and, if you’re interested in working with a financial advisor/planner, be diligent in vetting an individual in whom you can trust. Remember, building savings takes time. So, set your big-picture goal and map out a strategy to make that goal a financial reality.