It’s no secret that the current generation has it harder than many generations before it, as far as economic factors go. Millennials start out deeper in debt, with rockier job prospects than any generation in the past several decades. So here’s a page of advice for young couples just starting out, with the stuff that mom and dad never told you.
#1. Work towards zero debt as fast as possible.
The first big task is to nail that debt line back to zero. Pay off Student Loans first and settle car and home loans as quickly as possible. Interest is one of the great hidden killers of young families; accruing that grinding percentage against your income every month is like having a pack of hounds chasing you. The system is very much rigged to keep consumers in debt, so you have to fight against it. Naturally, avoide taking out loans and avoid credit cards at all costs.
#2. Start a savings account.
It doesn’t matter how small it is, and it doesn’t matter how little you put away in it. Even five dollars a week will grow at a tiny rate, and it’s five dollars more you have saved towards the future than you did before. It’s easier to avoid spending money if you’re saving it. Always just think of it as paying yourself.
#3. Spend for the present, not the future.
The above two points become far easier when you practice this. Too many young families end up buying things ahead of time, than accumulating a horde of stuff they never even used. The movies they never got around to watching, the treadmill that got faithfully used for two weeks and then became a coat rack, the extra dress bought for formal dinner parties that never ended up being worn, and so on. It’s easy to practice this, just limit your spending to what you can see yourselves needing this month, and put off other purchases until later.
#4. Learn to cook at home.
This is the biggest, boldest thing you can do to save money. Not only is home-cooked food cheaper, it’s also more nourishing, less fattening, and fresher than fast food. And by “home cooking” we don’t mean nuking a plate of pizza rolls in the microwave, we mean actual cooking with a range and a skillet and fresh ingredients. Nobody should be happy with not knowing how to cook. You’re planning on eating your whole life long, so you might as well be self-sufficient in this regard.
#5. Spend your free time learning instead of playing.
It’s true, an over-worked, harried couple just needs to melt in front of the TV, Internet, or game console for a few hours each night. The problem is that you don’t make any progress this way. Instead you could be practicing practical life skills, like learning how to maintenance your own car, fix your own plumbing, mend your own clothes, do your own taxes, and thousands of other things you can do to be self-sufficient. Most people will say they don’t have the time to learn to do things – and then they burn a whole Sunday watching football. Of course, you need some leisure time to stay sane and have some refrain from your grim existence. But when you work towards self-sufficiency, you then have more money and thus have to work less, making more free time. Learning anything useful is like hiring your future self to add years to your life.
No one is going to kid you here, this generation has a long haul to becoming middle class. But it’s not an insurmountable struggle. It’s surprising how much an opportunistic attitude and some thrifty budgeting helps you all your life long to become a smart consumer.
David Milberg is a finance expert and an investment banker from NYC.