2018 was an undeniable year for millennial interest in finance, financial planning, saving and budgeting. In fact in The Pinterest 100, Pinterest’s annual December list of the 100 trends for the coming year, they reported these search terms would continue to be of interest in 2019. They added to the list weekly savings planners, as they are “helping people cut corners, pay off debt and even save up for something nice,” and searches for “52-week savings plan” were up +295%. With so many looking for ways to save, budget and plan for the future, below are over ten tips from savings, loan and investment experts to help millennials set themselves up for success in 2019.
Sonia Lewis is the CEO of The Student Loan Doctor, a full-service coaching business that helps clients create a plan and understand how to pay off their student loan debt. Below she offers five ways millennials can reduce their debt in 2019 via student loans:
Work for a qualifying public service loan forgiveness employer.
Find an employer who is a qualified participant for the public service loan forgiveness program. If a graduate has a lot of student loan debt, strategically working within the public service field over a 10-year period can qualify the person to have the remaining balance of their student loan debt completely forgiven. Also, a person can change jobs over the ten years as long as the employer qualifies (501c3 status).
Select an income-driven repayment plan.
The Obama Administration left behind two income-driven repayment plans: PAYE and REPAYE. Both allow borrowers to repay their loans with a 10% calculation of their discretionary income. Utilizing these plans can save the borrower money on their monthly payment which can cause for a more significant opportunity to invest in other endeavors. Keep in mind on these plans the borrower should be mindful of accruing interest.
Nurses and teachers can receive additional loan forgiveness support.
Did you know that most teachers and nurses qualify for state-run loan forgiveness programs? For example, if the student loan debt was incurred in pursuit of a nursing degree, most states have funding to forgive the debt. Similarly, teachers have a special federal loan forgiveness program that can be used in conjunction with the public service loan forgiveness program.
Certain states have tax incentives for student loan repayment.
Typically there are limited federal tax breaks for paying on student loan interest. However, certain states- such as Kansas, Minnesota, New York, Nebraska and Connecticut- are creating state-level incentives to attract millennials and recent graduates.
“Health costs are rising faster than incomes — in 2017, prices sharply increased by 4.4% for singles. Already, 50% of millennials avoid seeing the doctor. Simply taking care of their health is eating up millennials’ paychecks, and if the American healthcare system doesn’t change, they’ll see half to two-thirds of their lifetime earnings going to healthcare.”
Chase recommends millennials choose an employer that offers a health plan with access to value-based primary care, which is a system that rewards doctors for positive patient outcomes, not the volume of services provided.
“By becoming advocates for better (and more affordable) healthcare, millennials can begin to take back their future and get the most for their dollar through the best insurance plans, smart employer benefits, and high quality/low-cost doctors.”
Courtney Richardson is an attorney and former stockbroker and investment advisor with fifteen years of experience in the financial services industry. She founded The Ivy Investor as a resource for women seeking to navigate the maze of the investment world in ways that make sense. For millennials also looking to invest their money once they’ve saved a portion of their income, Richardson offers the recommends exploring the following options:
Explore equity crowdfunding.
Before 2016, investing in startups was an option only available to accredited investors, individuals with incomes over $200,000 or individuals with a net worth of at least $1,000,000. Now, under the JOBS Act signed by President Obama in 2012, any individual can invest up to 5% of their net worth through crowdfunding. When investing in crowdfunding, investors need to remember that this is a long-term commitment and there is as much potential, if not more, for the business to could fail as it is for the company to succeed.
Consider peer to peer lending.
Investors have an opportunity to take on the role of a bank when it comes to lending others money. Through sites like prosper.com, investors can choose to lend money based on applicant’s creditworthiness in addition to the applicant’s intended use of the funds. Although returns can be as high as 16%, there is also a risk that investors will not get their money back at all.
Invest in music royalties.
Owners of intellectual property such as songwriters are entitled to receive payment each time their work is used. These payments are called royalties. With platforms such as SongVest and Royalty Exchange, investors can buy a piece of a song’s royalty stream and receive payment until the song’s copyright ends.
Invest in the U.S. government.
The United States government issues debt to finance its spending. Currently, the government offers seven different bonds and notes including traditional savings bonds. The term of the bonds and notes can be as short as several days to as long as thirty years. U.S. government bonds are considered relatively safe considering the country’s low inflation and political risk.
Buy tax lien certificates.
Buying tax liens is another way to invest in real estate without being a landlord. When property taxes are overdue, the county where the property is located places a lien on the property. This lien can be purchased by investors who can collect interest on the debt, the amount of interest is dictated by the law of the state where the property is located.
Rethink your living situation.
For single and divorced parents, while living with another family may not be the desired solution, these parents should think about their bigger goals and long-term plans. Friends and family members within the same millennial generation are opting to share living costs and raise their generation Z and Alpha children under the same roof.
Use technology to your advantage.
Automate your retirement plan contributions and deposits to savings accounts, so the money comes out of your paycheck before you even see it. As for your spending, websites and apps such as Mint, Acorns and Digit can help with things such as tracking your spending, investing, and automatically transferring funds to your savings account.
Live for your lifetime, not for the moment.
With technology and social media, millennials are continuously bombarded with temptations to buy and comparisons to other people’s lives. Remember to look at social media as a “highlight reel” of people’s best moments rather than comparing yourself to everything you see. Choose, instead, to invest your energy in tracking your daily/weekly/monthly progress toward your debt, savings, and investment goals. After all, consistency is key and small, mindful steps in the direction of your goals will get you there.