Every generation has suffered from some economy-related issues that have led to major problems in terms of personal finances. However, according to a Federal Reserve report, people born in the years 1981 to 1996 hold over $10 trillion in value and have over $4 trillion as debt.
The consumer-related debt overshadows the millennial’s success in finance, and their asset value from real estate, pension entitlements, mutual fund shares, and private businesses have been slowed down because of the Baby boomers and Gen X.
The on-going pandemic has only increased the financial pressure on millennials as many have reported struggling with bills such as rent, debt, and being able to save up for retirement. Everyone needs to start saving up and finding new ways to save.
To that end, we’re providing two major tips that will help you start your money-saving journey.
1. A High-Yield Saving Account
These types of saving accounts are not your typical ones, and they come with their own set of pros and cons. First off, as the name suggests, these accounts will grant you the opportunity to get a higher saving rate, and if your savings cross the $250,000 mark, they will be insured by a federal deposit insurance corporation. In the case of inflation, your saving value will not decrease. Lastly, you’ll be able to withdraw money more than any other investment.
However, the cons are that the interest rates may lower after the account reaches a predetermined limit. Some of these types of saving accounts only operate online, making it hard for the individual to withdraw from the account. Since they come with FDIC insurance, these accounts are considered a low-risk strategy for saving money.
2. Refinancing The Loans
Trading your previous loan statement with a new one is referred to as a refinancing loan. As interest rates begin to lower, as they do with student loans, refinancing can help you secure the same loan but with little or decreased interest rates.
This will result in you paying your loans faster since you won’t have to worry about the huge interest price tag. Like student loans, mortgages are also starting to reach a new low, and people take advantage of the situation.
In the end, it’s your job to make the most out of these two tips and focus on your money-saving skills. If the pandemic has taught us anything, it’s the importance of having a big chunk of cash stowed away to help muddle through the difficult days.