In a New Year, it is common to set targets and New Year resolutions that we claim we would abide by, many of which are forsaken before the end of the first quarter. Setting financial goals is no exception, so it is worth starting the year 2017 on a good financial path.
While most people turn to credit to support their finances once in a while, it has become a necessity for the millennial generation. This has led many of them into financial difficulty.
The latest Momentum UK Household Financial Wellness Index raised concerns about the overreliance on credit among the millennial generation (those between ages 16-34). The research found that 31% of this generation rely on credit to assist their financial management.
The Index also found that young people tend to have the poorest organisational skills when it comes to their finances. Results showed that 24% don’t keep track of their spending, and 21% have no formal budget to keep tabs on costs. Furthermore, 53% of these people will struggle to fund an unexpected expense without borrowing money.
These statistics are very alarming, hence the dire need for millennials to take control of their finances, and set personal financial goals for 2017. The top five personal finance goals every millennial should have include:
Have enough money for living expenses: Millennials are more concerned about the present than the future. They are more anxious about having enough money for everyday living, so they do not create a budget. Budgets are particularly critical when you are living from hand to mouth to manage your finances.
Becoming financially dependent: Financial dependence is the freedom from requiring the financial support of your parents. To gain this independence, millennials must open a savings account where a percentage of their monthly income is saved. Storing up money gradually saves you from incurring debt when you have unexpected expenses. A highly recommended money saving app is the ‘B’ app, which gives you access to a debit card account and an instant savings account. You also have a virtual account and a financial management assistant with you wherever you go, at the comfort of your smartphone.
Get out of debt: Most millennials have debt from university loans or credit cards. To pay these debts, a certain amount of their income must be allocated monthly towards achieving this.
Save for a big purchase: You may be saving to buy your first house or other property. It would be unwise to use your credit card for such huge investments because they are not considered necessities. Hence, they should be purchased when you have saved a reasonable amount of money.
Plan for the future: You must look towards your future and plan for retirement. Invest in beneficial ventures or financial investment packages.
You may have savings targets that never see the light of day or are somehow always postponed. Or, maybe your spending limits are off the roof because you never find the discipline to show restraint. Now you can use a financial app that will help you stick by your resolutions, achieve your financial goals, and enjoy the limitless possibilities.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.