Millennials constitute the largest working population in the world and thus make for the largest potential buyers for the real estate industry too. However in the UK, baby-boomers (born between 1946 to 1964) are largely the homeowners. Most of millennials are yet to buy their first homes.
For, the focus of this Generation is different from its predecessors. It is the first generation of tech savvy geeks who slept with laptops and reading devices (replacing books). Often touted as lazy and slacked IT professionals, this is also the generation of young millionaires.
However the common challenge for the segment is to win the balance between changing personal as well as social preferences. To achieve financial independence, their multiple battles include student loans repayments, mortgage, car loans, credit cards and personal loans, besides the basic expenses for household. Debt is the norm today and none is untouched by it. Indeed there are “good” loans to help you grow in life. But there are also other ways of generating an income that help repay your debts, such as learning how to make passive income and building a business around that.”
Let’s find out 5 golden rules to achieve financial freedom for millennials in 2018.
As a first rule of thumb, make sure you repay your credit card bills and loans on time. Student loan repayment is one of the biggest worries of people in their early 30s. Plan a 5-10 years repayment plan if you haven’t have gone further in your payments of student debt.
One of the best ways to make your loan payments less costly is to contact an FCA regulated, private loan advisor. They can share the affordable refinancing options. In many cases, they can also help you consolidate your main debt loan with small unsecured loans. With single affordable repayment it gets easier to manage the repayment. As you get rid of your student loan you would build good credit worth.
To buy home or not?
Those who have succeeded in managing their student loans target mortgages generally. However post the burden of student debt repayment, managing mortgage becomes a tall order. But becoming a home owner saves you additional renting cost and that money makes you owner (paid as loan repayment) within few year. Besides you can borrow homeowner loans. Thus becoming a homeowner enhances your credit worth.
Many millennials post 35 years of age, are on their family way and are more likely to get approved for home loans with a stable income source.
Have a budget. Build reserve fund
We all know, there should be strict budget for a household; but we ought to take this step for granted. To put your finances on roll, it is important to monitor your inflows and outflows carefully. You should strictly channelize your funds and minimize wastage.
Another useful strategy is to set aside a fixed amount every month for emergency fund. When you build a successful reserve fund post 50/30/20 rule you can conveniently face temporary cash lapses or emergencies in your life. You can also use these funds for debt prepayment or adding assets in your life.
As important it is to earn money and channelize it, as is to keep book of tax records. Always keep audit of financial records simple. You must use professional help and use tax saving investments methods and file tax every year. It is one of the best proves to establish your credit worth.
Last but not the least, you should plan for your retirement. Your risk appetite diminishes as you grow old and thus you should add credit worth in this time and age and build credit security for old age. This is why you must build your home well before the retirement age. Besides, buying various insurance and health cover, safe for PF.
All in all, financial independence is the result of persistent efforts and strict financial discipline. Despite the looming challenges post Brexit you need to walk on the righteous path to build credit. High inflation, high interest rate and stagnated wages are just short term challenges which would ease for those who refrain from compromising their credit scores.