The Millennial’s Guide To Making Ends Meet

For a few months now, we’ve seen a resurgence of generational conflict arising from a series of articles written in defense of one generation or in celebration of another. These pieces indicate that baby boomers have lied to millennials, millennials are lazy, all generations are destined for failure. There’s amusing, certainly and perhaps thought provoking—but none of them are right.

The truth of the matter is that the millennial generation is faced with a different set of problems—a generation told that college was the only option for a financial future has left them with mountains of student loan debt and a job that will barely cover the cost of rent. They’re a generation that is well spoken and well educated, but not well employed.

But they’re getting there. In fact, roughly 60% have no desire to climb a corporate ladder in search of the American Dream. As many as 71% have plans to quit existing jobs and work for themselves. The “you can do anything” mentality that has been criticized by older generations is resulting in young people who are willing to take a chance and invest on themselves.

If this sounds like you (or a child or a niece or a family friend), take note—it’s a long and difficult road, both mentally and financially. Fortunately, there are a number of ways to make ends meet as you prepare to be your own boss. By ditching bad habits that might be emptying your bank account and scoping out the passive income options available to you, you’ll be able to pursue your entrepreneurial dreams while paying your bill in time—and maintaining your all-important credit score.

Social Lending

As crowdfunding gains popularity, so does the idea of social lending networks. Such sites (Like Lending Club) provide a platform where the individual is the bank doing the lending. This means that you offer your current money to individuals in approximately $25 increments and charge interest. Some are high risk investments, but others offer a low risk way to make a little bit of extra money with little to no effort.

Real Estate Investing

If you’re already a home owner or in a position to become one, this might be a great option for you. Real estate investment and management is an especially good opportunity if you’ve got a bit of time on your hands. Most landlords make around $500 profit each month, which can really add up.

If you’ve got the property and home, but not the time, there are companies that will manage your real estate for you. For a fee, they’ll take care of maintenance, etc.—leaving you to collect a bit of extra cash.

Work For It

Of course, the easiest way to earn extra money is to simply earn it by performing a job. This is easier said than done, especially if you’ve got a traditional nine to five job. Luckily, there are a few jobs that a person with a college education and a persistent attitude can grab to increase their income.

Many people find plasma donation an easy way to make approximately $200 per month. Though it is considered a donation, plasma donation centers pay you for your time (about an hour each time you visit, excluding the first). Typically, the first donation of the week pays around $20, while the second offers $30. You can donate up to two times every week, assuming there is a day in between.

You might also consider getting some extra work as a freelance blogger. Many sites hire independently contracted people to write for them. Assuming you are able to make deadline, these types of jobs are great because you can perform them at any time from a variety of places. You should expect to make around $10 per entry.

Working for yourself will be no easy task, but millennials will find company in the experience of one another. Whether you’re a budding entrepreneur or a parent to one, let’s celebrate the diverse business experience each generation has to offer!

January Financial Reset

You’ve had your fun.  You spent the holidays with your loved ones, did some frugal gift giving (right?), and probably ate way more than you should have.  But, the new year is upon us, and it’s time to get back to business.  It’s time for a January financial reset.

With tax season right around the corner, there’s no better time to get all your financial books from the last year in order, take a good look at the balance sheet, and decide on the directions you’re going to take your finances in the coming year.  For some of you, that will mean finally getting a handle on your debt.  For others, it will mean finally paying off your debt.  And for more of you, it will mean finding the best ways to make your money work for you as you build your net worth and make strides towards financial independence.

For those in that last group of people, this post isn’t likely to help much, but you might want to take a peek at my Lending Club page for a great way to keep your money working for you.  The rest of you, stick around.

Reformulate your debt

January Financial ResetIf you’ve still got debt hanging around, a new year financial reset is a great time to investigate reformulating it. What the heck does that mean?  It means taking a good look at the debt that you’re carrying, and considering the options you may have to pay it off earlier.

  • Reduce the rates: The worst feature of credit card debt is the interest rate that they like to charge.  12%, 15%, 22%, or more.  The interest payments eat into any payment you make on the debt quickly, and make it that much harder to make any meaningful progress.  If’ you’ve got good credit, consider finding some good 0% balance transfer cards to transfer your existing balances to.  You should be able to find something with a 12 to 15 month 0% rate.  Be aware of the balance transfer fee when you do this, but otherwise it can be a good way to help you make some good progress on your credit card debt repayment.
  • Refinance: In some cases (mostly secured debt) you may want to look into a refinance of the loan.  If you can reduce the rate on a loan and extend the length of it, it can free up some of your debt repayment money to go towards loans with higher rates and speed up your debt snowball.

Recalculate your debt snowball

Now is also a really good time to update all the numbers on your debt snowball plan.  (or debt avalanche if you’re so inclined) Unless you’ve been keeping it updated throughout the year, the numbers are probably pretty out of date, and need to be freshened.  Take the time, while you’re doing this, to determine if you need to move one debt ahead of another, or if you can afford to increase the snowball payment to speed it up.

Seed your budget

Your budget can be the lifeline for your financial life.  It’s a blueprint for how you’re building your financial house.  Even a simple budget can help tremendously, and the beginning of the year is a great time to give your budget a full inspection (or just to start one) and make sure that it’s got all the categories you need, that it’s still balancing, and for planning out where you’re going to focus your efforts in the new year.

Examine your bills

We all get bills throughout the month.  In many cases, we throw them in a pile, then enter them into bill pay, (or, gasp, write checks) and then forget about them until they show up the next month.  While you’re going through your finances from the previous year, pay attention to the bills that you’re paying.  Are there bills that have increased?  How about ones that you meant to cancel the service but didn’t?  Or maybe there are some that you just haven’t called to try and get a better rate for?  Know what time it is?  You guessed it.  It’s time to cancel that service. It’s time to call and see why the rate increased, and if there’s a change you can make to get a better rate.  It’s time to compare your services with their competitors and see if there isn’t a better rate/service available out there.  You may think it’s a waste, but you could end up saving hundreds a month.  And that can quickly make your debt snowball grow!

Keep on your financial path

Here’s the most important thing you have to take away from this post.  You’ve got to keep on that path.  Once you’ve done the things above, you’ve taken some really solid steps on your path to being debt free, but they’ll only work if you keep working with them.  Keep that budget going, keep a close eye on your bills, keep your snowball updated, and know how much debt (and at what rate) you have left.  Whether your debt feels like a mountain, or just a molehill, knowing the what/when/where of it make the climb that much easier.

Will you take the time to do a January Financial Reset?

Do We Inflict Peer Pressure On Ourselves?

When my husband and I got married, we were flat broke.  Broke.  We bought the cheapest wedding bands that we could find, and my diamond is small.  However, that was my preference.  I wanted to stay within budget, and I personally like smaller diamonds rather than the big rocks that some women wear.  (All I could think was that when I had babies, I’d accidentally scratch them with a big ring.)

Still, there have been times that I’ve been in the presence of a group of women, each with a huge rock on her hand, and I’ve been a bit embarrassed by my small diamond.  I’ve wondered what other people thought of us and our financial situation.

Peer Pressure Doesn’t End in High School

In high school, peer pressure is at its peak.  If you want to be popular, you have to follow what the other kids are doing.  I didn’t cave to peer pressure often.  Instead, I had a few close friends, and I followed the path that was important to me.  I was relieved when I graduated because I thought the peer pressure would finally be done.

In college, I found that the peer pressure did relent.  People would respect your choice if you didn’t do what they were doing.

However, as I got older, I began to realize that there are societal norms that you’re expected to maintain.  This becomes the “keeping up with the Jones'” phenomenon.

The Pressure Becomes Internalized

Self Inflicted Peer PressureMy husband and I are digging our way out of serious debt.  We are scrimping and saving, knowing that in a few short years we will be out of debt and can start fresh.  We can have all of our money be our own once we’re out of debt.

Meanwhile, we drive a 10 year old minivan with over 125,000 miles on it.  I wear my small diamond ring, which I don’t ever plan to replace with a bigger version.  We rent an apartment instead of owning a home.

No one is pressuring me to spend money that we don’t have.  No one is passing judgment on us (at least not to us directly).  But it’s hard not to look at other people’s lives and see the “stuff” that they have.  The nice cars.  The nice home with brand new furniture and a manicured lawn.

No one is telling me I’m failing, but I feel it sometimes.  I feel that I’m not living up to society’s standards.  I can see how easy it is to want to keep up with the Jones’, even if you can’t afford it.  I can see how easy it is to pull out the plastic just this once because you’ve been scrimping and saving and just want to be like other people once in a while.

For the people who can afford it, there is no danger in this.  For the people who can’t afford it, there’s just debt and heartache.  You might then be just like those you want to be like.

Me, I’ll keep resisting the peer pressure, even though now it’s mostly pressure I put on myself.