If you’re a young adult, you might think that money is hopeless for most people. Most publications and news outlets have labeled millennials as freeloading individuals who would rather spend their money on things they want. It’s common for young adults to live in their parent’s basements and struggle to find well-paying jobs after college.
Despite the negative headlines these stories generate, they don’t represent the reality of today’s young adults. Misrepresentations of them can also be dangerous. The idea that young people earn less than $40,000 a year and only work until they die is frightening. If they’re set up to fail, why bother?
If you’re a young adult, then you have the opportunity to start building wealth right now.
A great way to start increasing your wealth is by setting up recurring payments for various expenses, such as your bills and retirement contributions. These payments will automatically be deducted from your bank account, ensuring you don’t fall behind and rack up late fees.
However, make sure to review them regularly. This will help you to identify areas where you can improve and increase your savings.
Contribute to Retirement Funds
Despite the tough job market and the rising student loan debt, young adults still have plenty of time to build wealth for their retirement slowly. According to Anthony Montenegro, a financial advisor at The Blackmont Group, there is still plenty of time for them to build wealth.
One of the most important factors people consider when building wealth is the time they have available to take advantage of their investments. According to Montenegro, having more time to build wealth is a distinct advantage over starting to save for retirement at the age of 55.
Even if you have already started to save for retirement, you must continue to increase your contributions each year. This will allow you to take advantage of the tax-free gains generated by your investments.
According to financial advisor Jose Sanchez, you can increase your contributions to your retirement accounts by 1% each year until you reach the point where you can fully fund them.
If you can get away with it, increase your contributions to your retirement accounts by whatever percentage you can. This will allow you to take advantage of the tax-free gains generated by your investments. You can also build wealth by opening a Roth or traditional IRA.