Home Credit card ‘Read the Fine Print’ and More Money Lessons for Millennials Approaching 40

‘Read the Fine Print’ and More Money Lessons for Millennials Approaching 40

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Jokes that millennials are perpetual children age about as quickly as millennials themselves. With the oldest of our generation turning 40, lately we’re less on rosé all day and more on term life insurance.

Geriatricians among us were already working (or trying to do it) when the Great Recession hit. And now, some of the older members of Gen Z are graduating in virtual ceremonies and taking their first wobbly baby deer steps in an uncertain economy in the era of the pandemic. Look, Gen Z, we know you laugh at our skinny jeans, but we also know the fear you’re hiding behind those overconfident TikToks.

We understand and we want to help. Think of millennials as your cool but slightly out of touch older cousins. In 15 years you will be us: trying to save for both a down payment and daycare, wondering why your friends can afford to travel and you can’t, and feeling like you missed out the check mark by opening a retirement account. Time flies, so listen.

Don’t wait to get started – or for help

Building a good financial foundation is not one of those tasks you can put off. It’s easier to start when you’re younger, even if you don’t have a lot of money yet because your life is probably less complicated.

Watch: The miracle of composition – How to invest: Ep. 3

Plus, if you approach money with a “meh” attitude in your twenties, you won’t have the savings down the road to do the things you need or want to do.

“The sooner you get your finances together, the less compromise you’ll have to compromise,” says Priya Malani, founder and CEO of Stash Wealth, a financial advisory firm based in Charlotte, North Carolina.

If you are feeling overwhelmed, don’t wait to get help. With our recent adoption of virtual meetings, it’s never been easier to connect with a financial advisor without having to take a day off to get to your office. A word of warning, though: Bad money advice is everywhere, and it’s easy for influencers to sound like experts when they’re really just brand ambassadors.

Nerdy tip: Financial advisers are available at a variety of prices. At NerdWallet, we recommend that you work with licensed, registered and paid Trustees. This means that they do not earn money from commissions on the sale of financial products.

Responsibly adopt credit cards

Building your credit history opens up a lot of possibilities, and credit cards are often a way to start with their relatively straightforward application processes.

“I think credit cards are misunderstood, and most people think of them as bad,” says Malani. “People don’t really realize how effective a tool can be. “

With good or excellent credit scores, you have a better chance of qualifying for more rewarding travel or cash back credit cards, or loans with lower interest rates, which can save you money. a lot of money on a future car or house purchase. But to get good credit (corresponding to a FICO FICO,
-0.44%
score of 690 or higher), you need to understand how credit cards work so that you can choose a card that is right for your current situation and use it with care.

Brooks Dozier, a 35-year-old man living in Overland Park, Kansas, was around 18 or 19 when he received a credit card offer in the mail. He accepted the offer, got the card, and quickly ran out of his credit limit.

“I didn’t think about the consequences,” he says. But reality struck when the first credit card bill arrived. The account went into collections, and it took her years to pay it off. In addition, the derogatory notes remained on his credit report for seven years.

Dozier’s advice to the next generation: “Please read the fine print. Don’t just accept a credit card because they offer it to you, as it can really set you back.

Lily: Find out how this 24-year-old paid off $ 20,000 in credit card debt in less than a year

Malani recommends that you think of your credit card as a debit card that deducts money from your checking account once a month.

“You are using someone else’s money,” she says. “Using it to improve your lifestyle is not the right way to think about it, and this is where people get into trouble.”

Save for retirement and the short term too

There is a lot of financial advice that can make you feel like a bad person if you don’t make retirement savings your top priority. Yes, saving for retirement is important, but with probably 40 years before your retirement, you also need to save for short- and medium-term goals along the way.

You don’t want to have to wait until your late sixties to have fun. And I’m not just talking about big stuff like buying a home. It’s also about hiring professional housekeepers, signing your child up for the soccer team, and getting adult braces – all the not-so-cheap things you might want for yourself. in the near future. (Believe me when I say housekeeping is worth it.)

“Nationally, we are sending very strong messages to this age group to start saving for retirement,” says Katherine Liola, Founder and CEO of Concentric Private Wealth in McLean, Virginia. “You have to make sure that you also focus on the whole life that will unfold before retirement. “

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Sara Rathner writes for NerdWallet. Email: [email protected] Twitter: @sarakrathner.


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