Millennial Money: Wealth Management 101 / by Jasmine Tate

Many millennials enter the workforce and instantly make more money than they have their entire lives. Although it can be exciting, this reality of “adulting” can also cause anxiety. There are many factors to consider and expenses that were previously foreign for several students entering adulthood or adults who were never given tools and resources to succeed.

My financial training at home was limited to sound advice that I heard constantly from my dad.

"If you never spend all of your money, you’ll never be broke; always save something.”

While that advice is simple and true, there’s much more to saving, investing and preparing for the future we dream of, no matter what elements those dreams contain.

After attending “Wealth Management 101,” a financial planning workshop hosted by Orange County United Way Emerging Leaders United I felt relieved, enlightened and a bit overwhelmed. For rising professionals when it comes to financial planning and management everyone has to start somewhere. According to Roger S. Stinnett, Managing Director of Wealth Planning at First Foundation Advisors, who co-led the presentation, going back to the basics are a great place to begin. From economics in high school, taking “Success 101” as a freshman in college and lessons from this workshop and others I’ve learned along the way, here are things to keep in mind when preparing for your future financially.

Start with a budget.

Managing your money is a lot easier when you know what you have and how you’re spending it and should include three key components.

  1. Income: what you bring home after taxes

  2. Fixed Expenses: Repeating bills that never change such as rent, cable and internet, etc.

  3. Flexible Expenses: Other bills and responsibilities that fluctuate month to month such as gas and electricity. Although flexible expenses can change, I budget a specific amount based on my normal usage.

    Example: My gas bill is usually $15-$30 depending on how much I cook during the month, but it has never exceeded $30 so that’s the amount I have budgeted for that specific bill.

There are several worksheets and templates that can be found online. I opt for a Microsoft Excel Spreadsheet because my life is basically lists and sheets and it does the math for me. ;) Fortunately, I don’t have any student debt or car payments, but these are other expenses that could/should be included in your budget. You’ll see that tithes and savings are both included as well.; Millennial Money; Wealth management 101.png

Manage your debt and savings.

Once you’ve planned your budget, the next step is to determine your payment periods and methods. I have a separate spreadsheet that outlines when each is due. There are many ways to handle payment planning. Some people pay bills as they receive them; others pay them when they’re due. Auto-pay is another great option and one I use for most of my bills, however; it’s important to make sure that there are funds in your account to cover each the amounts being withdrawn.

Because I get paid bi-monthly and know which bills are paid from each check, the bills that aren’t set to automatic withdrawals are submitted on the first or 15th of the month when I get paid. This way I don’t have to worry about spending over my budget or forgetting about due dates. I still include the deadlines on my calendar and check them off as they’re paid because I enjoy seeing red check marks. :)

Stinnett shared his double-card method, where he opts to use two credit cards to manage his expenses- one is kept at home for repeating payments and the other used on a regular basis. One thing I like about this method is that the card used for repeating payments will likely never be lost or stolen. Don’t forget to pay balances off each month to build credit and avoid losing money on interest.

Understand your goals and what it takes to reach them.

Although according to Stinnett, “Social Security is a math equation waiting to be solved,” it’s ideal for everyone to try to avoid outliving their expenses. Planning is a great way to reach that goal and any others you have. Whether you want to pay off your debts, own a home or retire by 60, it’s important to think about the details of those plans and how they can become reality.

Stinnet advised attendees with multiple debts including student loans and mortgages to start with eliminating low balances then focus on debts with high interest rates and consolidate them into one loan if possible.

Take advantage of opportunities to stretch your income.

Although its recommended to save 10-15% of your income toward retirement, many Americans don’t save at all and bypass employee benefits such as 401k and 403b plans. For companies that offer a match incentive, employees that don’t take advantage decline free money. It’s advised to always accept at least the employee match percentage at minimum.

Example: Company A offers a 3% match when you invest a minimum of 10% of your pay. Invest the 10% to gain the company’s 3% offer.

Stinnet advised participants to set investments to Target Date Funds after they have opted into the policy for the lowest maintenance and urged attendees to avoid cash, as its normally the worst performing option. He also recommended asking questions to understand limits of plans by the employer and investment entities such as Fidelity.

In addition to employee matches and incentives, activate other ways to earn and save money such as spending rewards and cash back. Stinnett’s double-card method referenced earlier is a great way to earn points on daily spending that provide results such as miles and cash back.

Although I am not a certified or authorized banker or financial advisor or planner, these are tips and methods that have helped and worked for me over the course of my young adult life. If you have any feedback or questions, please share and/or seek a trained professional.

What are your best budgeting tips or financial planning advice you’ve received? Share below or engage on social media using #RealWorldWed.


Jasmine C. Tate