Millennial Money: Take your money to the next level – Natural Self Esteem

Millennials may still feel pretty young (despite those pesky gray hairs and fewer fine lines), but in many ways we’ve grown up. So it’s time for our money management to grow up a bit too.

Your financial to-do list is small but mighty in your 20s. Setting up automatic transfers to a high-yield savings account, contributing enough to your 401(k) account to receive the full employer subsidy, and paying off high-yield debt can get you pretty far.

Now you can do more to fuel your financial success in your 40s and beyond.

GET A HIGHER CREDIT Score

You don’t have to treat a high credit rating like a valuable work of art. Good credit can qualify you for better credit terms, so act on it.

Try to lower the cost of borrowing. “In terms of your money, refinancing is an important thing to do,” said Priya Malani, founder and CEO of Stash Wealth, a financial consulting firm in Charlotte, North Carolina. “If you can move even a quarter percent on a really big mortgage, you’ll save tens of thousands of dollars.”

Get a better deal on high-interest credit card debt. As your financial situation improves, you may qualify for a transferable balance card that offers a year or more of 0% interest.

If you don’t have credit card debt but are still using the barebones card you got when you were 21, switch to a card that earns cashback or travel rewards. However, leave that old credit card open and use it every now and then to keep it active. (The average age of your accounts is a factor in your creditworthiness, and the older the better.)

ADJUST INVESTMENTS TO A VARIETY OF GOALS

Here are two ways you can up the ante on your investment. First, if your employer offers a pension plan with a match and you’ve contributed just enough to get that match, consider making a higher contribution. A general rule of thumb is to save 10% to 15% of your pre-tax income for retirement.

Next, set your mid-term goals for the next five to 15 years. You can invest for these goals by using other types of accounts such as Use taxable broker accounts and 529 accounts to fund early retirement, save for your child’s education, or plan for other large expenses.

Money for short-term goals (within five years or less) should not be invested. Instead, a high-yield savings account is a better place to hold that money until you need it.

CONSIDER HOW YOU CAN IMPROVE YOUR CAREER — AND YOUR LIFE

If you spent the beginning of your career climbing the ranks and grinding yourself down, you probably had little energy to think about what kind of work (and life) you would actually enjoy most. When you’re financially stable and moving forward in your career, you can start thinking about what’s next for you.

Shehara L. Wooten, board-certified financial planner and founder of Your Story Financial, a financial consulting firm in Dallas, says you don’t have to wait until retirement to do the things you really enjoy.

“You might even want to take some time off if you’ve planned properly,” she says. “If you can’t do that, take some time to figure out how you can get paid better, how you can really be appreciated for the work you do.”

Wooten also recommends enlisting the help of a financial advisor to discuss what kind of lifestyle you want to lead in retirement and what savings you need to amass to get there. You may have skills that can translate into a better paying career that will help you reach your goals faster.

PROTECT YOURSELF AND YOUR LOVED ONES

What worked when you were 25 and single won’t work when you’re 35 with two kids and a mortgage. Here are some ways to protect your family:

— INSURANCE: Malani recommends term life insurance if you own a home with someone else, have someone who relies on your support, or have a co-signer on one of your loans.

– ESTATE PLANNING: Talk to a probate attorney about making a will, naming guardians for your children, appointing a medical power of attorney, and other daunting but necessary details.

— UPDATE BENEFICIARIES: Review who you have listed as your beneficiaries on your bank and investment accounts. If this information is out of date and you should die, your money will not go to the right person.

GIVE TO OTHERS

As your salary grows, it becomes easier to meet your needs and still have money left over every month. Some of this money can be used for good causes. Estate planning can also help you determine how you will donate money or valuable possessions to charity.

“I like it when people write down their story and go to the end of their lives,” says Wooten. “What’s that supposed to look like? What do you want people to say about you? What do you want your legacy to include?”

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This column was provided to The Associated Press by personal finance site NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Sara Rathner is a writer at NerdWallet. Email: srathner@nerdwallet.com. Twitter: @SaraKRathner.

RELATED LINKS:

NerdWallet: How to invest your savings for short-intermediate or long-term goals https://bit.ly/nerdwallet-invest-savings-short-intermediate-long-term-goals

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