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Financial fitness advice for millennials

Five experts share their ideas for taking control of your own financial future -- how to save, spend and pay off those student loans.

By Jan 23, 2014 2:59PM

This post comes from Chelsea Krost at partner site on MSN MoneyIt is no secret that the economy today is… well... not the best, and to top it off the millennial generation is faced with an unsteady job market. Beyond that, the average student graduates with nearly $30,000 in student loan debt nearly $30,000 in student loan debt. So you may ask, what is a mllennial to do?

Young man sitting at a table in front of a laptop holding a credit card © Jack Hollingsworth, Blend Images, Getty ImagesWhat we can do is educate ourselves on how to best financially prepare ourselves for an uncertain future. During the past year I’ve interviewed a number of experts about this very subject on my show, and here I’ve pulled together the best pieces of advice they had to offer. We covered student loans, emergency savings, credit scores, taxes and even how to start saving for retirement. Each expert shared his or her knowledge, tips and resources, which certainly made budgeting a bit more sexy and simple than it sounds.

Here’s what they had to say.

Erin aka Broke Millennial: Financial responsibility & budgeting

About 61 percent of millennials are receiving financial help from their family and more than 50 percent of millennials depend on the financial habits of friends to determine their own saving and spending moves, according to a new study. According to blogger Erin aka Broke Millennial, we need to take financial responsibility for ourselves, even when it comes to paying for college.She says, “by requiring students to have a financial stake in their education, parents are teaching them to place a monetary value on the experience and make critical decisions about which university makes the most financial sense. Giving the child some financial tough love will bode well for them in the real world after college."

Learning how to budget is one of the most important tasks someone has to learn in order to get themselves financially fit. Erin breaks simple budgeting down like this, “The first step to budgeting is to write down all of your mandatory expenses such as rent, cellphone bills, student loan payments, insurance and groceries, and subtract those from your income. By knowing the money you have available to you after your expenses, you can begin to focus on how much to save, allocate towards retirement and use for discretionary spending. It helps to spend two weeks writing down every penny you spend to monitor any places you can cut back and track where your money goes.”

Sophia Bera, founder of GenYPlanning: Student loans

If you have student loan debt, Sophia Bera provides great insight on how to stay on top of your situation. Sophia advises that you call your student loan provider to find out if you qualify for any of the following: Pay As You Earn Program, Income Based Repayment (IBR), Income Contingent Repayment (ICR), or Public Service Loan Forgiveness. “Student loans are just one piece of the pie, so make sure you take care of high interest rate credit card debt right away and build an emergency fund,” she says. Since student loan debt is one of the top five stressors amongst millennials, take the time to research all of the options available so that you can make the best financial decision for yourself and your future.

Manisha Thakor, founder & CEO of Money Zen: 50/30/20 Rule

Founder and CEO of Money Zen Manisha Thakor says, “Most people want to get financially fit but don’t know how.” She says that the three most powerful words in personal finance are, “Start Saving Now.”
 Only 1 percent of millennials say they're saving to buy a home, 4 percent claim to save for starting a business, 9 percent for starting a family and just 6 percent for retirement. It doesn’t matter if you put away $50 or $500, over time your money will accumulate in what she calls a snowball effect.

If there is a rule to live by, Manisha’s says follow the 50/30/20 rule. This powerful rule of thumb says in an ideal world roughly 50 percent of your income goes to needs, 30 percent to wants and 20 percent to savings. To stay in the best financial shape, Manisha says always start off by socking away 20 percent FIRST for savings and then figuring out how to make do on the remaining 80 percent.

Brittney Castro, founder of Financially Wise Woman: 3 Ways to improve your credit score

Brittney Castro shared her three tips on how to improve your credit score. She says, first and foremost, check your credit report and scores. You can check your credit reports at each of the major credit bureaus for free once a year at Beyond that, you can use’s free Credit Report Card for a monthly breakdown of the information in your credit report along with two free credit scores.

It’s important to remember that each of us has dozens of credit scores, but they are all based on the information in the same credit reports. So it’s most important to focus on the factors that make up your credit scores: your payment history, the amount of credit you’re using compared to what you have available, the age of your credit, the number of credit inquiries you have and the different types of credit accounts you have.

Castro also says to set up payment reminders or automatic payment to eliminate your debt. These reminders will help you to avoid or worry about late fees. Lastly, reduce the amount of debt that you owe.

Mario, founder of 401k plans and self-motivation

Mario lives by the motto, "Don't let yourself be defined by your debt; be defined by your progress.” He believes that we live in a culture that often focuses on the achievement at the expense of looking at progress. What really matters are the slow, consistent actions we take each day to move a little bit closer to our goals. He says one of the most important habits to develop early on is to start investing in an individual retirement account and/or your work-offered 401(k), especially if offered a company match, as soon as you get your very first full-time job.

What I have learned from each of these experts is that you have to find which method of budgeting, saving and spending works for you. No one is going to take care of your financial situation other than yourself. The time is now to get organized and get educated on how to best financially prepare yourself for the future.

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