YOUNG adults face a number of challenges when taking charge of their finances – and there are several myths Millennials should be aware of.
To help, Erin Lowry, a personal finance expert, has demystified them and offered tips for young adults to take their financial life to the next level.
Erin, 32, told The Sun about one of her first experiences with money.
She was only seven years old and she wanted to earn some money.
Erin, who now lives in New York, decided to sell Krispy Kreme donuts at her mother’s garage sale.
Her father agreed to be her support and cover the initial cost of the donuts.
Then Erin hired her four-year-old sister and the two of them sold glazed donuts for the $0.50 markup.
Her parents were never very fond of gifts, so even as a child Erin wanted to earn her own money.
Erin’s parents also taught her lessons in finance growing up and regularly talked about money.
She said: “I remember my dad bringing home the importance to me and my sister when we were quite young.”
She even jokingly described her childhood as a financial “school of hard knocks”.
Yet, thanks to her experience at the garage sale and her regular dinnertime discussions about money, Erin already had the knowledge of value-based spending, how to save, and how to budget as an adult. .
But when Erin graduated from college, she realized that not everyone had this knowledge, even people from privileged backgrounds.
For this reason she was inspired to write Millennial Broke share knowledge and help young people take control of their finances.
She also wanted to make it easier to have conversations about budgeting, financing, and investing with other people.
Erin has noticed that one of the biggest problems with young people trying to become financially independent is that they don’t ask questions.
Erin explained, “Young people don’t want to be vulnerable and [be intuitive] because they are afraid of being perceived as inferior to.
“If young people don’t ask questions, there’s no way to learn.”
So to help you, Erin has decided to demystify some financial myths.
Myth #1: Investing takes a long time
The first myth that Erin decided to debunk is that investing takes a long time. It’s not necessary.
There are different types of investing that require different types of action.
For example, long-term investing generally requires minimal action.
Sometimes people don’t check their accounts for months at a time.
However, investment strategies such as day trading will require more action and time commitment from account holders.
It is important to note that investing is not a guaranteed way to make money and you should never invest more than you can afford to lose.
Myth #2: If you’re not good at math, you can still control your own finances
A lot of people think you have to be good at math to manage your own finances, but that’s not the case.
There are plenty of people who aren’t math whiz who manage their own finances, including Erin.
The thing is, a lot of people who aren’t good at math get mentally shut down when something involves numbers.
Erin said, “Psychology plays a much bigger role.”
Myth #3: Just because your family hasn’t invested doesn’t mean you shouldn’t
You don’t have to follow everything your family does. You can create your own path.
So if investing wasn’t something your family did but interested you, you should learn how to do it.
Such myths can be particularly harmful to anyone trying to take control of their finances.
That’s why Erin strongly encourages young people to read what they’re trying to do.
She also recommends people hire a Certified Financial Planner (CFP) to help them achieve their financial goals.
However, when hiring a financial planner, she insists that you choose a CFP who will speak to you equally and objectively.
If you have a partner, you’ll want the financial planner to talk to both of you this way as well.
The reasoning behind this is that both parties in the relationship feel involved in money making decisions and know what is happening to their money.
The last thing Erin strongly encourages is for young people to ask questions.
She said: “Don’t be afraid to ask how much money someone makes or what brokerage someone uses.
“This is how you develop and broaden your knowledge of finance.”
The Sun also spoke to Vivian Tu, a former Wall Street trader turned educator, about ways to make more money.
In addition, we explain a budget strategy that can help you move out of your parents’ home.
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