Still looking for a new year’s resolution? Taking steps toward financial freedom and growing your wealth is a undoubtedly savvy move to make in 2023. For millennials in their late 20s to 30s, this year is a great opportunity to make long-term investments and build a financial safety net. Whether you are looking to buy a home, start saving for retirement or simply learn more about investing this year, here are a few tips that can help you get started on your financial journey.
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It’s never too early — or too late — to start learning how to invest money, and the sooner you can build your financial literacy and prepare for the future, the better. Keep reading to discover six smart investing moves every millennial can make in 2023.
Save For Retirement
If you are in your 20s and 30s, retirement likely seems like lightyears away. However, it is essential to start saving for retirement as early as possible in order to avoid delaying retirement or having to set aside larger sums of money later in life.
Additionally, many employers offer an employer match 401(k) plan that can help you double your monthly investments.
If you already have an IRA account started, a key investing tip to take advantage of is maxing out your 2022 retirement savings through April.
“Make a goal of maxing out your IRA for 2022,” said Nathaniel Hoskin, founder and lead advisor at Hoskin Capital, a wealth management firm. “You can contribute to an IRA up until you file your taxes, which for most is April 15. The single biggest mistake made by people in their 20s and 30s is missing out on a year of contributions to an IRA.”
Build a Good Credit Score
If you have debt in your 20s and 30s, now is a great time to eliminate it and start the new year off by getting rid of financial burdens.
High-interest debt can be an especially heavy financial burden and it’s best to hunker down and pay this off as soon as possible. Be sure to evaluate your credit card debt and personal loans this year and eliminate these payments before making any major financial investments.
Boost Your Income
What better way to make more room for investments and a brighter financial future than by increasing your income?
If you are struggling to set aside money for retirement or a new home and don’t have an emergency fund, it might be time to boost your pay. Consider developing additional income streams such as finding a side hustle, freelancing or coaching. It may be helpful to consider areas you have expertise in already and how you can apply them in a monetarily beneficial way rather than learning something new.
Build an Emergency Fund
It’s advisable to have an emergency fund in case of unexpected life events such as losing a job or a medical emergency. Having an emergency fund can save you thousands of dollars and stress down the road as it can reduce your likelihood of needing to borrow money or take out a loan.
“Establish an emergency fund of at least three months of expenses,” Hoskin said. “This is your “recession protection” so that a surprise expense or job loss doesn’t mess up your larger goals like buying a house or going back to school.”
Automate Your Finances
If you are consistently forgetting to pay back credit cards, automating your finances can help you create a good credit score and make larger financial purchases in the future.
“Automate sending money to your investment account on the same day you get paid,” said Taylor J Kovar, CFP and CEO at The Money Couple. “Automate bill pay to never fall behind on a bill. Automate paying off your credit card weekly. You will be so surprised at much peace of mind this can bring to your financial situation.”
Grow Your Financial Literacy
One of the best gifts you can give yourself this year is investing in your financial literacy. Taking the time to learn about finances will leave you better prepared for the future and allow you to enjoy more financial freedom and preparedness.
“Invest in your financial education,” Hoskin said. “Whether it’s by buying a book or taking a course, the more you can understand your finances, the more confident you can become. This will also reduce the money spent on financial advice.”
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