Millennials have several obstacles when it comes to saving for retirement, most notably hefty student loan debts. If you're trying to put away more money for the future but struggling to meet your financial goals, try putting a few of these financial best practices to work.
Take advantage of the retirement savings programs your employer offers, as well as any employer matching programs.
When a company offers to match your IRA, 401(k), or other retirement account contributions, they're essentially offering you FREE money as a reward for putting a little something away for later. Don't miss out on this opportunity if it's offered to you!
Live within your means. Make a budget and stick to it.
Look through your last few months of bank statements and see where your money is going. What's going to bills and necessities? What's getting frittered away? Make a budget outlining all of your monthly expenses, and then see what you can reasonably put towards retirement each month if you cut down on extra spending. To do this, it's important to distinguish between wants and needs. Decide what makes you feel like you're not completely depriving yourself, and allocate a small amount of money towards that each month.
Use tech tools to keep on top of your financial goals.
There are many extremely popular (and even free) financial management and budgeting tools available for the tech-savvy. You could use websites like Mint to stay on top of your personal finances, as well as their app to manage your financial affairs on the go! You can also use your smartphone to set up bill-paying reminders, bank account alerts, investment updates, and more.
Keep your credit consumption low.
While maintaining a healthy credit score is an important part of being an adult, an unruly amount of credit card debt can quickly evaporate any money you intended to put towards your retirement savings. Don't use credit cards to bankroll a lifestyle that you can't actually afford, and keep ongoing balances to a minimum. A common rule of thumb suggests says that you should keep your credit utilization levels at less than 30 percent of your available credit.
Reduce your student loan bills by taking advantage of Income-Based Repayment plans (IBR) or Pay as You Earn plans.
Recent student loan reforms may enable you to save big on those monthly student loan bills. If you have federal student loan debt that you feel is absorbing far too much of your budget, contact your lender and inquire as to whether you're eligible for the IBR or Pay As You Earn plans. These plans limit your monthly payment to 10-15 percent of your discretionary income, with full loan forgiveness in 20-25 years (depending on when you borrowed), or in just 10 years' time if you work in the public sector
Read more about budgeting tips for millennials with big student loan debts, or discover some of the best free online budgeting and financial management tools.