7 Smart Financial Decisions for Millennials

unsplash-view1bMany Millennials are stressed with their current financial condition. According to Insider and Morning Consul, 72% of millennials struggle with anxiety over undergrad debt. Adding a car loan, phone service, rent, food and other living expense to the monthly expenses can easily become overwhelming.

Unfortunately, many don’t know how or have resources to get started on the right path.


Among the overall population, Millennials are the age group with the lowest level of financial literacy. In a recent survey, only 24% demonstrated basic financial literacy and 8% demonstrated high financial literacy.

Take time to educate yourself on basic financial principles. Subscribe to financial websites, read books that cover basic financial principles and listen to financial based podcasts.

Talk to your parents or other trusted individuals with more financial experience than yourself. Ask them what financial decisions they made that they are glad they made and which they would advise you to not repeat.


Today we have access to many financial tools that did not exist 10 years ago.

If a simple Excel spreadsheet isn’t working for you, download a budgeting app to help you monitor your spending habits.

Use Electronic Fund Transfers (EFT) to automatically fund your Savings and Retirement accounts to reduce the temptation of skipping a payment.

Financial Dashboards will consolidate all your accounts and give you a central, simplified view of your entire financial status. Many will also allow you to make electronic bill payment.

To help get monthly bills organized, setup autopay to avoid late fees.


The heavy weight of student debt is common across all millennial demographics. Many are delaying personal milestones such as starting a family or purchasing a home.

There are several methods used to pay down debt. One of the most common is the “Snowball” system. Start reducing debt by first taking an inventory of all debt you have incurred. Determine which debt has the smallest balance and then take any extra funds you may have to pay that debt off as quickly as possible. Once the first debt is payed off and closed, apply it’s payment to the next largest balance. Continue this process until all debts are paid.

A second variation to the Snowball system is to pay off the balance with the highest interest first and continue paying off each remaining debt based on the next highest interest rate. This process may make sense financially but typically does not motivate individuals emotionally as much as the act of closing multiple accounts quickly.

If you are currently in college, take action right away to stop incurring student loans. Take on an extra job, reduce your expenses or consider stretching out your education a few more years by working full time while going to school part time. Take advantage of any scholarship opportunity through your school, your family background or via online resources. If you are paying out of state tuition, consider transferring to an in-state school.


One of quickest ways to pay off debt is by reducing your spending. Before your next paycheck, determine which required bills will get paid first. Take the remaining amount and decide how much you want to spend on debt, food, entertainment and misc. purchases. When you are done you will have a plan for your entire paycheck.

To stay accountable and on track with their plan, many people find value in filling plain envelops with cash for each spending category. When your envelope is empty you know when to stop going out for dinners, going to the theater or purchasing clothing.

Other ways to reduce spending may include temporarily cancel subscriptions to services that are not completely necessary.  Instead of purchasing large ticket items that you may not use often, consider borrowing from a friend or renting. If you are in need of repair services, check to see if you can barter your skills to help the providing service company.


Millennials face many financial challenges and often fear that they have few resources in case of an emergency. Nearly 50% don’t believe they could come up with $2,000 if an unexpected need arose within the next month.

To protect yourself from getting into more debt when an unexpected expense occurs, build a small savings account that is equal to one month of your house hold expenses. While you are building up this fund determine what would constitute a true emergency. Generally, this fund would pay for dental/medical care, car repair or job loss expenses but not a sale at your favorite store.

You can fund your emergency fund by cutting back on current expenses, selling unused items or picking up a second job.


Start saving for retirement as early as possible no matter how small the amount you may have. Due to the power of compounding interest a small retirement account will grow to be verify profitable if given enough time.

Using a basic compounding interest calculator like investor.gov, you can see that investing $1,000 at age 25 and adding $200 /month for 30 years with an avg return of 7% will provide almost $235,000 for your retirement. If allowed to grow for 40 years at the same interest rate, the account could be almost $500,000.

If you participate in your companies 401(k) match program, your earnings will grow even quicker.

Retirment Graph


Often starting new habits can be overwhelming and uncomfortable. A Financial Coach can meet with you on a regular basis and together you can determine which financial goals you should pursue first.  They can assist you with building a monthly spending plan and a debt reduction plan. They can also educate you on large purchases like a car, home or travel. Most importantly, they can support and encourage you when get discouraged.

At Kuderer Financial, we understand from experience the emotions that come with financial changes and challenges. We will walk through the tough decisions and celebrate the victories with you. We specialize in educating our clients so they can make financial decisions with confidence.

Contact us today to setup a personal one-on-one meeting to learn how our coaching services can move you closer toward your goals.