Most Millennials have grown into the young adults of today, and are generally considered to comprise the age group born between 1980 and 2000. These are the people struggling with issues like student loan debts, trying to enter the workforce, looking at buying homes, or moving back in with their parents.
This is also the generation currently dealing with a nationwide $1.2 trillion student loan debt, a $17 trillion dollar national debt, and whatever debt is incurred over the next few decades. They are considered ill prepared for financial management. For these young people, one rule of thumb for financial success is to follow the 50/30/20 rule.
An oft-repeated phrase to those trying to plan for economically stable futures is “live below your means.” Unfortunately, many people don’t understand what their means are, or what it means to live below them. A popular rule suggested by financial management professionals is to break up income into three parts: necessary payments, future investments, and non-essential payments.
By following this plan, Millennials and others entering the financial world can be better prepared for the future.
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