What Every Millennial Need to Know About Money


Whether you’re employed, unemployed or self-employed, and whether you’re married or single, you need to be on top of your finances if you want to get ahead in life, meet those important financial milestones (buying your first home anyone?) and avoid getting into debt or feeling generally disempowered when it comes to money.

We're still young, so you may not have thought much about the money you earn and what you do with it, but it’s important that you start if you want to build a comfortable life going forward. With that in mind, here are a few things that every millennial needs to know right now…

Money Today is More Valuable

The money you have today is more valuable than the money that you may earn in the future. Why? Quite simply because compound interest is a thing. If you save the money you have now, rather than spending it knowing that you have time to make more in the future, you will be less well off when you’re older simply because any money you save now will earn interest and that interest will also earn interest.

The moral of the story?. Save as much as you can now because it will make you wealthier in the future.

Compound Interest Can Also be Devastating

Of course, compound interest is not always good news. When it comes to debts, compound interest can be a killer. The longer you take to pay off any debts you accrue, the more you will pay off in the future because your debts will accrue interest which will accrue interest of its own and so on.

The moral of the story? Avoid debts, but if you do need to take out loans or use credit cards, pay off more than the minimum each month to minimize the effects of compound interest.

Your Time is Valuable

Something that many younger people do not really think about is the value of their time, but time is the most valuable asset that you have. It is important that you take the time to work out how much your time is worth  so that you can charge the appropriate amount for your work or go for a job with a salary that you believe is worthy of you, and also so that you will not procrastinate so much or waste time on pointless tasks that will ultimately leave you poorer.

The moral of the story? Time is your greatest asset and you must value it accordingly.

Sometimes You Need to Take Risks

There are many people who play fast and loose with their money, thinking nothing of gambling it all away on the toss of a coin and others who are so risk-averse that they never seek new opportunities and never do what they can to see their money grow. Ideally, you need to find the middle ground between the two. You need to be sensible with your money, but you also need to be able to calculate when risks are worth taking. That means you need to find places to read about short-term loans that could lead to long-term gains and information about the stock market and smart risks that can lead to better financial security, and you need to devour that information. You need to learn all you can and be willing to take risks when the time is right.

The moral of the story? If you always play it safe, you are unlikely to be as well off as you could be, but risks do need to be cleverly calculated.

You Must Diversify

What do you do with the money you make? Do you spend most of it and save a little for a rainy day or do you put some into a savings account, play a little on the stock market, invest some in property and buy a little gold?If you do the former, your gains are likely to be limited, but if you do the latter, your pool of money will probably grow far greater.

The moral of the story? Diversification is the key to future wealth. The more pots you have your money in, the more potential it has to work for you now and as you grow older.

Saving for Retirement is Not Optional

You might think that you’re young enough now that you don’t need to worry about your 401(k) or saving for a pension until you’re older, but the sooner you start making provisions for the future, the easier it will be to build up enough cash you live the retirement of your dreams and the more you will have to ensure you’re secure when the time comes. This is another instance where our old friend compound interest comes in.

The moral of the story? You’re never too young to think about your retirement, and saving for old age when you’re young is the sensible thing to do.

Side Hustles are a Smart Way to Make Money

Thanks to the internet, it has never been easier to supplement your income and boost your wealth. Anyone who has the drive to do so can earn more money by working as a freelance writer, setting up their own perfume store on Etsy or a million other things. That means, no matter how poor your salary might be, or how far out of reach your dream house might seem, you do have options.

The moral of the story? There are opportunities out there for everyone to reach their full potential and make as much money as they need, if only they work hard at it and look outside the box.

Knowledge is Power

Finally, like with everything, when it comes to money and managing one’s finances effectively, knowledge is power. The more you know about your incomings and outgoings, the state of the stock market, the price of goods in various stores and so on, the better you will be able to make and save money without getting into difficulties.

The moral of the story? Knowing as much as you can about money will pay off in numerous ways.