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How to Get Rid of the Broke Millennial Stigma
The average American millennial has a net worth of $8,000 while having $27,251 in non-mortgage consumer debt.
Set up an emergency fund
Setting up an emergency fund is one of the most important (and obvious) financial advice ever given. Why? Because an emergency fund turns a crisis situation into a small inconvenience.
In case you lost sleep doing financial calculations which filled you with fear and anxiety, it’s time to put those feelings to sleep.
Besides your mental health, an emergency fund serves a purpose of equal importance. It saves you from sinking into years of debt or from losing your hard-earned assets (like your car or house).
In case you encounter an unanticipated financial emergency, the emergency fund will see you through.
How much should you save?
Most financial experts advise the emergency fund should have enough money to get you through 3–6 months without any income. Take into account a period of unemployment caused by losing the job or simply quitting without having a new job as a source of income.
The emergency fund should have enough money to keep you sane, healthy, and safe.
Do not invent assets
Don’t add to your emergency fund an asset that might lose its value (a car, for example). If your goal is to have $30,000 and you have $20,000 in cash and a car that is worth $10,000, you haven’t reached your goal. Yet.
The car might break down and lose value or simply depreciate through time.
Start by saving $1000
Saving $1000 is the first step made famous by financial expert Dave Ramsey. And it makes sense. While this amount of money will not get you through 3 months of unemployment, it will save you from those moments that hurt you in the long term.
This small fund might help you avoid refinancing debt or postponing a medical visit.
