It’s a challenging time to become an adult. Here are some financial strategies that can help for starting off on the right foot.
Gen Z has experienced a lot, from a pandemic to job disruption. When 22-year-old entrepreneur Taylor Price realized that she’d never been taught how to use a credit card or pay taxes, she decided to launch a career to share personal finance tips with her peers. Here, she shares some thoughts on how gen Z can help tackle their biggest money problems and build long-term wealth.
Most people are trying to do a lot with their money: save for a rainy day, invest in stocks, find a high-paying job, buy a house, set aside money for retirement, and so on. How does anyone prioritize?
Price has an easy way of organizing her financial life into one bigger picture; she visualizes a “money” tree. First, she starts with the roots, or an emergency fund, health insurance, car insurance, and other needed protections. “When a storm comes by, those will hold you to the ground,” says Price.
Next is the trunk, or your primary source of income; as it grows, it makes the whole tree stronger and more stable. And at the top may be branches and leaves that are additional sources of income. However, those shouldn’t make or break your finances if they happen to fly away in the wind.
“That can be … investing in your side hustle and trying to make it into a full-time business,” says Price.
Another way to track where your money is going is to organize it into buckets. This could mean setting up different bank accounts for various goals, or even using the envelope method with funds separated by type of expenses. Price separates her income into two big categories: necessities and play money.
Necessities are things like rent, utilities, groceries, and insurance. Play money includes anything that’s more of a want than a need, like a vacation. She also has buckets for short-term versus long-term goals (a new purse versus a down payment), as well as savings versus investments (a high-yield savings account versus a 401(k) or brokerage account).
If all these different categories seem hard to keep up with, Price has one word of advice: automate. The fewer clicks it takes to deposit money into your savings and retirement accounts, the more likely you are to help grow your wealth.
No matter what’s going on in economic news, Price says it shouldn’t stop you from trying to improve your financial situation. A visual and mental exercise might help with both goal setting and intention.
An example: You want to find a different job. Stating that goal, writing it down, and internalizing may keep it at the front of your mind. You might browse job search sites more often than you normally would, suddenly remember the name of an acquaintance working in a field you’re interested in, or overhear a conversation about a networking opportunity you hadn’t considered before.
“If you create a vision board, or you put [a goal] on the back of your phone case, or you put a little sticky note on your mirror every morning that says, ‘I can and I will save for a house,’ you might help place yourself subconsciously in different opportunities that you didn’t see before,” says Price.
By focusing on your money mindset, you focus on the things you can control. Put $10 more each week into your savings. Ask one friend to take a look at your resume. Take 30 minutes to read about saving in retirement accounts. You can do this—one step at a time.
79% of millennials and Gen Z-ers have gotten financial advice from social media, according to a survey by Forbes. Social media can be a way to discover useful financial tips, but it shouldn’t be the end of your research, she says. Price recommends reaching out to trusted sources, friends, and family members with money questions.
A version of this article originally appeared on HerMoney.
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