With the value of the American dollar plummeting, and student loan rates at an all time high, saving money is less of a recommendation and more of a necessity for Millenials. Many experts insist that young professionals put away at least a third of their income in order to adequately prepare them for the future.

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Millenials, It’s Time to Invest in Your Future
Savings & Personal Finance
Invest-Smart
January 2014
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Preparing for Your Future
If you recently finished school and have landed your first serious job, you may
think it’s a little early to start worrying about saving and investing your money. That
couldn’t be farther from the truth. No matter how you look at it, the earlier you start
saving, the more you’ll have later. Plus, figuring out how to manage your income
now will make things far easier down the road when you are buying a home or
planning for retirement. The cultivation
of good financial habits brings life-long
rewards. These initial budgeting tips will
help you find your financial footing and
begin investing in your future.
Cover your bases.
As you begin thinking about long-term
goals, make sure you have a plan of
action in place that will address your
immediate situation. That should include
paying off any student loans you may
have. With an interest rate of 5-6% or
more, it’s important to pay off student loans as soon as possible—especially since
federal student loans are the most difficult type to shake. Current law makes it extremely difficult to have student loan debt discharged during bankruptcy. Of course,
no one should be planning for bankruptcy, but one key to a financially secure future
is to address debt before life gets even more complicated. You don’t want old debt
looming over your head when you’re planning a family or looking for a home.
In addition to paying off your loan debt, it’s important to put away emergency savings. At some point in the near future, you will have unexpected expenses. When you
have to pay for major car repairs or an unexpected surgery, you will thank yourself
for setting the money aside and sparing yourself from debt.
Determine your long-term goals.
Even if you don’t have your whole life figured out, chances are you have a feel for
your major priorities and interests. If you plan to travel the world while you are still
young, your saving habits will look a lot different than if your goal is to retire early.
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Articulating your goals will help you determine how much to save every month.
Some advise young people to set aside as much as one third of their monthly
income, while others say to save at least 10%. Whatever amount you decide on,
make sure to set aside money for each of your important goals (from retiring early,
to owning a home, to traveling the world) on a monthly basis so none of your goals
get neglected.
Looking Ahead
The benefit of saving right away is that you won’t get used to a lifestyle that you
later discover is too expensive. It’s much easier to start lean and work your way up
than it is to scale back on the things you used to enjoy.
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