Millennials have been stereotyped and misrepresented as a young, narcissistic generation that spends without thought on the latest trends such as the infamous “smashed avocado” hype. They are also viewed as a generation that is not keen on retirement planning. 

But this negative view of how Millennials tackle their financial matters may stem from a misunderstanding on how Millennials manage money differently to their parents or grandparents. Millennials face struggles that are different from other generations, making it harder for them to secure a good retirement. 

What is the retirement nest egg value needed to have a comfortable retirement? The most commonly cited superannuation balance is $1.6 million. However, experts say there is no correct figure. It is usually advised to use a retirement calculator to remove the guesswork when planning for your retirement. 

But if you are a Millennial looking to achieve that seven-figure savings to have a sufficient retirement income, here are ways to do it. 

Be smart about your spending

Well-known business magnate and investor Warren Buffett, who is also named by Forbes as one of the richest people in the world, once said, “Do not save what is left after spending; instead spend what is left after saving”. If you aspire to be a millionaire, you should be more conscious about your spending. Here are some tips to manage your money: 

Minimise expenditures

One good strategy to minimise your spending is to track your expenses for a month and account for every single dollar you have spent and what you spent it on. After the month, evaluate where you are spending unnecessarily and where you can save more money. Are you spending too much on store-bought coffee? Are you eating out more often than necessary?

It can be difficult to change your lifestyle instantly, but keep in mind that your financial future is at stake. Being aware of where you are spending needlessly will make it easier to avoid those expenses going forward and get you on track towards being a millionaire.

Create a budget

Set up a budget to have an insight into your financial picture. A budget will also help keep yourself accountable for your spending. Explore nestegg if you want to learn more on how to create a budget. 

Prioritise financial goals 

You may be eager to save money as soon as possible, but having health insurance and an emergency cash fund should be on top of your list. While Millennials are less likely to have chronic healthcare issues, unexpected traumatic injuries and illnesses can strike at any time and result in significant bills that can lead to bankruptcy.

Emergencies are also an unavoidable aspect of our lives, so it is best prepared before they occur. Talk to your financial adviser about the types of retirement insurance you should avail that would be best suited for you.  

Boost your income  

One of the main things that will set the course for your earning potential and help you become a millionaire is your income. Here are things you can do to boost your earnings.

Maximise earnings from your full-time job. If you are working a full-time job, the easiest way to boost your income is to ask for a pay hike. Compare your salary with other people with your level of experience in the industry to gain insight of what you’re worth. If you are earning below their range, you can ask for a raise. It is natural to be afraid to ask, but it will not hurt to try and it will also help you from undervaluing yourself and your services. If this doesn’t work out, you can put in more hours at work or cover more shifts to earn more. 

Find other sources of income. More people are now working side hustles to maximise their earning potential. To build wealth, pick up a part-time job or freelance work that will give you more income other than your full-time job. This can be any job, including driving for ride-sharing companies such as Uber, doing delivery app jobs, photography or selling items online. 

Avoid debt

Ideally, you should avoid being in debt. But if you cannot avoid it, it is advisable that you weigh up your options. 

Most Millennials are now turning away from using credit cards, with just 41 percent owning one. If you have a credit card, make sure that you will only use it in ways you can afford to pay when the bill arrives. 

If you plan to make a personal loan, make sure that you are well prepared to make payments when it is due. Spending money you don’t have will eat away at your future earnings. It can affect your retirement planning as well.   

Invest wisely 

After saving money and boosting your earning potential, it is important to put your money to work. 

If you have opened up a superannuation account, learn how your super is invested. Be more involved about your super and explore your income options so you can choose the best one.  

It is also recommended to invest in retirement assets outside your super. You can choose to start with the most basic investments, including stocks, bonds and real estate. You should seek professional advice when creating an investing strategy to help you mitigate potential risks. 

Conclusion 

Becoming a Millennial millionaire is not impossible. Following these steps can help you stay on track to becoming one. 

In saying all this, you should not limit yourself to the end goal of becoming a millionaire. You can decide whatever your dollar figure of financial freedom is and set it as your goal. 

Are you a Millennial planning for retirement? Explore nestegg for more information. 

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