By: Agatha Singer
Millennials have it hard in all matters of money and finance. And according to a recent survey, millennial women have it even harder than men. The main financial challenges before them are repaying student loans, inability to save much, and struggles with buying a home. Resolving these issues requires clever financial management and use of different money-saving solutions and plans.
3 Main Financial Challenges for Millennial Women & Tips for Overcoming Them
1. Repaying Student Debt
The majority of student debt belongs to women today. For example, in America $890 billion of $1.4 trillion in student loans are held by women, reports CNBC News. One of the reasons for this is that more women graduate from higher educational programs than men today. This could be a good thing if not for the fact that many freshly graduated millennials struggle with finding a job right away.
Solution: They are even less likely to get a well-paid job. Therefore, it’s very common for them to be late with their bill payments. The rapidly growing student debt, compounded with other expenses, can quickly turn the total debt insurmountable.
Methods of dealing with a huge debt that you should try include:
● Establish a budget.
The lack of understanding how to manage personal finances most efficiently is one of the main issues responsible for the millennials’ problems with debt. Education yourself on the matter and establishing a strict budget should be your first step. You can use helpful smartphone apps like Mint or YNAB to create a budget and track your expenses. Be sure to include minimal monthly loan payments + extra into your budget.
● Renegotiate your interest rates.
Your loan isn’t set in stone. If you struggle with payments, you should talk to your creditors and try to change your interest rates or payment terms. Note that sometimes it might be best to take out a different loan at better terms to repay your current debt immediately.
2. Inability to Save Money
About 35% of all millennial women have no savings at all. And many more admit that they struggle with establishing a savings account beyond the retirement plan.
What you need to deal with this issue is to find new ways to save money whenever possible. Some of the most significant expense cuts you can make include:
● Give up on credit cards.
If you are prone to overspending, stay away from credit cards and use debit or cash only until you achieve your savings goal.
● Switch from insurance to warranty.
If you currently have home insurance, check if switching to a warranty will be more cost-efficient in the long run. You can look up home warranty plans comparison to see options available to you now. They are often more flexible than insurance coverage, so you can get more value for your money.
● Remove one small non-essential expense a month.
Can you go a month without visiting a salon or eating out? Choose one non-essential expense from your budget every month and transfer the money you would have spent on it to your savings account immediately.
● Cut your travel expenses.
Switch to a bike instead of a car and walk to the grocery shop instead of driving. If possible, organize shared rides with coworkers so all of you get to reduce commuting expenses.
3. Not being able to buy a home
It’s a fact that millennials rent more than buy homes today (Washington Post). The reason for this is that they simply cannot afford the latter. The majority of millennials are either lacking in funds for a down payment, have bad credit score, or don’t have a good enough job to make their paycheck eligible for a mortgage. Quite often, it’s all of these issues combined that prevent a young woman from becoming a homeowner.
If you want to get a home of your own, you should:
● Use all of the tips listed above to save money for a down payment.
● Start using credit cards to improve your credit score. But only when you are 100% sure that you will be able to repay the debt you incur right away.
● Try using specialized loan programs to help you get better mortgage terms, like VA or USDA loans.
As financial challenges that millennial women face are diverse and widespread, it’s important to always use every available trick to manage your money more efficiently. You can use all these ideas regardless of whether you are having any issues now as this will help you prevent them in the future.
I’m Agatha Singer, a work-from-home mom of two little nuggets. My interests range from the latest business management trends to healthy living and adventurous traveling. I always stay open to new ideas and expertise to make my writings handy and captivating for you. I’ll be happy to see you on my blog: agsinger.com!