Afrotista’s 5 Tips on Building Wealth
As a millennial, you’re likely navigating the balancing act between student loans, rent, saving for retirement, and maybe even starting a family. It can feel overwhelming, but financial planning doesn’t have to be challenging. Here’s how I learned to build wealth:
1. Start Saving Early
Time is your greatest asset. When I got my first job in my early 20s, I put money into retirement accounts like a 401(k) and IRA, even if it was a small amount. I learned that the earlier you start, the more your money will grow thanks to compound interest.
2. Set Up an Emergency Fund
Life is unpredictable, and an emergency fund helped me prepare for the unexpected such as my car repair and losing my job. I aimed to have three to six months of expenses saved up in a high-yield savings account to float me through.
3. Pay Off High-Interest Debt
$40k in Student loans and $25K in credit card debt weighed me down. I had to focus on paying off high-interest debt first, which helped me free up more money for saving and investing in my future.
4. Invest in Your Future
I invested in the stock market, focusing on companies that I was interested in. I didn’t need to be an expert— I just started using apps like Robinhood and Fidelity. I used YouTube to learn about investing in the market and to see how people navigated the market. It is a risk and so I had to be comfortable with whatever I lost. Whatever amount I put in I thought it as money I never had unless I saw a gain.
5. Create a Budget
I learned that building wealth requires a plan. I created a realistic budget to track my income and expenses. Some of the methods I gravitated toward was the 50/30/20 rule—50% for needs, 30% for wants, and 20% for savings and debt repayment. It still allowed me spend on my happiness in a sense.
By starting early, staying disciplined, and prioritizing savings and investments, I learned that I could build a strong financial foundation that will serve me well throughout my life. I encourage you to not wait for tomorrow, start now to learn and secure your financial future.