There are countless headlines circulating in the financial media about millennials poor financial outlook. After reading about the soaring student loan debt, stagnant wage growth, and other issues, it may seem like financial freedom is just a dream that is no longer reachable, but nothing could be further from the truth. As long as you make the right financial moves while youre young, its still 100% possible to turn that dream into a reality.
Dont turn down free money
When youre in your 20s, its understandable that retirement could be the last thing on your mind. However, the early years of your career are by far the most important to your long-term financial health, so its important to get a few major decisions right.
One that is particularly important is making sure you take full advantage of your employers 401(k) match, even if it feels like a stretch to have that money withheld from your paycheck. According to a TIAA-CREF survey, 23% of employees who have the opportunity dont contribute enough to receive the full match.
If you dont get the full amount your employer is willing to match, its like giving away free money. You wouldnt be happy if your salary was cut by say, 4%, but thats exactly what youre doing by turning down the free money thats offered to you. And, keep in mind that the true value of those 401(k) contributions are more than they seem. If youre 25 years old and earn $50,000 per year, a 4% employer match is worth $2,000 per year. Over a 40-year career, those employer contributions alone can balloon into a six-figure nest egg.