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No matter your financial situation, it's always a smart idea to take stock of your finances.

Spring Cleaning Finance Tips for Millennials

Money_HandsMillennials may be among some of the tech-savviest of all the other generations, but that doesn’t necessarily mean they’re the smartest with personal finances. According to the most recent COUNTRY Financial Security Index ® , only 57 percent of millennials have a set budget and one in three (33 percent) have either never checked their credit report or doesn’t know their credit score. For millennials, and really most Americans, debt and spending habits seem to the biggest points to address.

While everyone is in the “spring cleaning” mode, it’s an ideal time to address that thing you wish you didn’t have to: personal finances. I know many of us wish we could all just trade sea shells and live in harmony, but until that happens here are a few tips to get your finances in shape for spring:

 Secure Online Accounts

Millennials are hands-down the number one generation to embrace technology and find creative ways for using technology to their advantage; however; few millennials take things like password protection and other online safety precautions as seriously as they should. Perhaps because this generation feels most comfortable with technology, the trust is higher than with other generations, but financial accounts are prime targets for hackers.

If you use the same password for multiple accounts, financial or not, it’s time to change that. For millennials, an ideal solution is a password manager that installs as a browser plug-in and then syncs to all other devices. These password managers will cost you (but not very much at all), but they’re worth the money for the protection and time saving benefits of not having to guess passwords or find where you wrote each one down. Some even offer web-filling form options so you can save time that way too.

Beyond securing accounts, monitor your credit and other financial accounts to make sure you haven’t been hacked or had your identity stolen. By law, you have the right to check your credit with all three major credit bureaus once a year, so make this part of your spring cleaning check list too!

Address the Debt

Almost all Americans carry some form of debt, and so paying down debt is at the top of many financial spring cleaning lists. Depending on your personal choices, some debt is okay and at times necessary while other debt is not. For millennials, student loan debt and credit card debt seem to the two most troubling areas of debt.

Student-Debt-Cartoon-BigUSA Today called millennials’ student loan debt their “ball and chain,” saying that “for many 20- and 30- somethings, paying off the cost of college takes priority. Marriage, a house, and family will have to wait.” For this reason, many millennials find themselves unable to enjoy full “adulthood” and struggle to find “economic footing.” And in fact, this isn’t just a problem impacting this generation. This same article by USA Today also reminds us that massive student loan debt (a trillion dollars) could also harm the entire country’s economic competitiveness. So, what can you do if this is your situation?

First, make sure you are making payments on the loan. A standard repayment option will have you paying equal monthly payments over a 10-year period; a good solid option for most people, but you may want to consider other options depending on your current situation. For example, if your debt surpasses your income, an income-driven repayment plan may work better. This plan will have you paying monthly payments established as a percentage of your income. A word of warning: with this option, interest charges are high and there’s quite a bit of paperwork for income verification. If neither option is possible at this time, there are resources to help you that also include a Public Service Loan Forgiveness federal program that can forgive student debt after 10 years for certain people. Bottom line: clean up your student loan debt by managing it and educating yourself on your options for repayment.

To address credit card debt, one idea is to use any tax refund money to pay down high-interest credit cards you may have. This may not be what you had in mind for that refund money, but paying down these high-interest debts is a great idea in the long-run. However, if your credit has taken a hit due to debt,  it’s also important not just to pay down debt where you can but also work on rebuilding your credit. There are a few ways to go about this. One way ideal for millennials is to simply rent. By making recurring payments on time, your credit will improve. If you’re already in a home or unable to rent (depending on the severity of your credit issues), you can also ask a trusted friend or family member to make you an authorized user on one of their credit cards. The take-away message here is that you don’t need more credit cards to rebuild credit or pay down debts.

Control Spending Habits

It’s a nasty but oh so necessary word: Budget. It seems simple to plan a budget and follow it, but if you don’t choose a plan that’s easy to follow, implement, and manage, you’re less likely to stick to it. If you’re a millennial (or anyone for that matter!) wanting to control your spending habit, consider using an app that will do it all for you.  Of course, no money management tool will work if you are overspending, so before budgeting try to cut out unnecessary bills like cable and home phone.

There are all sorts of money managing apps out there, but two top ones are Level Money and Mint. Mint has been around for a while but Level Money is pretty new. Both apps connect to your bank account (but don’t worry, they’re very secure and use the encryption used by banks) and help you to visually see where your money goes and how to manage it based on your long term goals.

Level Money calls itself a mobile money meter that works as a sort of financial GPS. It provides users with tracking tools, spending and bank balance history and projections, and also tracks cash flow while giving insight about your spending and saving behaviors. Mint is a little different in that it is not as intuitive or user-friendly, but it’s still a great, reliable budgeting app. You can set up multiple personalized budgets and track spending with Mint, and this app provides free credit checks with tips on how to improve your credit score. Both apps are free and available as apps for both Apple and Android devices.

Implement Savings Plan 

Once again, there’s an app for that: Digit. The apps mentioned above can also help you set up a savings plan along with a budget, but Digit is specifically designed for people who hate saving money but need to. Americans under the age of 35 have a savings rate of -2 percent, according to findings by Digit, so their message-based interface and now iOS app can help millennials save to pay down debts. This “automated savings plan” saves a few dollars at a time (from $2 to $8 on average) from your checking account to a savings account backed by the FDIC, even managing it for you. This may be a little too “hands-off” for some people, but implementing a savings plan should be a part of your financial spring cleaning plan in some way.

Implementing a savings plan is that much harder if you don’t work for a business that offers retirement benefits, and with an increase in the “gig-economy” that’s increasingly more people’s situation. So whether you work for yourself or not, having some plan of action is essential for a bright financial future. The Obama administration, in hopes to address the $4.13 trillion shortfall in retirement savings, devised their myRA plan that allows people without workplace retirement to save money. The program is a retirement fund that offers government-guaranteed U.S. Treasury bonds. The goal is to help people get started saving earlier to be better prepared for their own retirement, so if an app isn’t going to cut it for you, you might find this new program helpful.

No matter your financial situation, it’s always a smart idea to take stock of your finances, assess where you are and where you want to be. You financial health will follow you for years to come so take things seriously today to avoid trouble later!

About Alyssa Sellors

Alyssa Sellors was an English and Journalism educator for eight years and now works as a freelance writer and journalist. She is a regular contributor to a number of publications. In her spare time, she enjoys traveling, reading, and spending time with her husband, baby boy, and two chihuahuas.

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