Personal finance expert Laura Adams is partnering with employee benefits leader Unum (NYSE: UNM) on a series of money tips for the nation’s different generations. Some of her top tips for Millennials this summer include:
1. Check the progress of your financial goals
We’re halfway into 2018, which makes it a perfect time to check the progress of your financial goals. Identify areas where you may be over-spending and commit to refocusing your savings efforts. If you don’t already have a plan, consider creating one using the 50/20/30 rule.
• 50% of your income should be dedicated to living expenses and essentials like rent, utilities, groceries and transportation
• 20% of your income goes towards your savings, investments and debt
• 30% of your income is for flexible spending for things like dinners out, the movies or travel
2. Send some of every paycheck directly to savings
Having extra money set aside can be the difference between surviving a financial emergency—such as losing your job—or getting buried under it. Have a portion of your paycheck direct deposited into a dedicated savings account and set the goal of maintaining three to six months’ worth of living expenses in that account. While it might be tempting to invest your cash, stick to low-risk options so you keep your emergency money completely safe from market volatility.
3. Challenge yourself
Cutting unnecessary expenses is the key to living below your means, so you have plenty of money left over each month to reach your financial goals. Give yourself a challenge by actively resisting expenses that are most tempting. For instance, you might try:
• Cooking dinners at home every night for a month and bring in the leftovers for lunch
• Waiting at least 24 hours before buying anything more expensive than a certain dollar amount
• Skipping the theater and staying in to watch Netflix
4. Fill insurance gaps with accident, life and disability coverage
Millennials are buying homes, starting families and moving along in their careers. With all this “adulting” come added responsibilities. A recent survey from Unum showed that half of households could only pay bills for two months or less without assistance. Two great and affordable financial safeguards are disability and accident insurance.
• Disability insurance replaces up to 60% of your income if you can’t work due to a covered accident or illness and the money can be used to cover expenses like mortgage payments, car notes or even credit card bills. Best of all, disability insurance is affordable. You can generally get a great policy for about $20-30 per month.
• Accident insurance pays you directly for out of pocket costs associated with urgent care or ER visits, transportation to the hospital and even follow up care or physical therapy.
5. Check on and update your 401K retirement savings account
One of the best ways to save for retirement is to take advantage of 401K savings accounts through your employer. Many employers will match up to a certain percentage (generally 3-6%), so that should be the absolute minimum you’re contributing.
For more of Laura’s tips and to learn more about saving money and living healthy, visit Unum’s WorkWell.