Millennial Finances: 5 Ways To Dig Your Way Out of Debt

When I was a little girl I always said I was going to become a teacher and get married and have children at the age of 25. What a cute, naive little dreamer. I couldn’t have known, nor would a five-year-old care, that my generation was facing one of the biggest financial hardships since the Great Depression. Debt would be a way of life for many millennials.

Stress and finances go hand in hand for a majority of people.

I mentioned on my homepage that the number one stressor for millennials is finances. Millennial debt is staggering compared to generations in the past. We are the lucky ones who have inherited mistakes of the past.

How much money we have, or don’t have, occupies our mind every day. If you are part of the “don’t have” side of things, it is often not your fault as there is so much we are up against.

Let’s be honest, some of you out there are making decisions you know are not financially sound. Stress due to financial issues is an everyday worry for you.

Financial burdens can include student loan debt, auto loans, hefty credit card balances, and not securing your future by contributing toward retirement. 

Millennials born between 1982 and 2004, have 300 percent more student loan debt on average than their parents, and one in five live in poverty, HuffPost reported.  

One big issue is leaving it up to us to do our homework on how to be smart when we applying for a loan.

Sure, to an extent, this is our responsibility.

But, if you ask me, managing finances is really something that should be taught in college, if not high school, as a regular part of the curriculum.

Perhaps the worst part of millennial debt is the crippling repercussions for our future. Financial difficulties delay us from starting our life the way we always imagined.

Some millennials put off getting married and having kids because they haven’t “made it yet” in their field. They are still trying to dig their way out of debt, despite obtaining a job. Sometimes, what you get paid isn’t enough to make a dent in your dent.

This is depressing and downright stressful dammit! Let’s move on to what we can do about it.

After all, stressing less is all about pursuing solutions to our problems and not allowing them to get bigger.

Here are some suggestions for digging your way out of debt and securing your finances for now and the future.

Keep in mind, I do not claim to be a financial expert by any means. These are merely suggestions and things that have worked for me.

With this in mind, I suggest listening to podcasts about investing in your future, purchasing a book to educate yourself on financially sound decisions and doing your own research on financial decisions that are best for you.  

Any way you can, learn about dwindling your debt. Start with what debt is most crippling for you and tackle each hurdle one at a time.

Like I said, I am not a financial expert. Instead, I’m going to link you to some websites with very useful tips on getting your finances in order.

Contribute To Your Retirement

Contributing to your retirement is perhaps one of the most important financial decisions to make.

Check out this article on how to get the most out of your 401K. If contribute toward your retirement it will leave you with less money in the present. Some people let this dictate their decision to pay towards their 401K because they’d rather buy what they want now.

But, consider this, when you’re over 65 years old, would you like to keep working? Without, income later on, you may even have to take a part-time job with low pay to support yourself.

This would likely happen if you buy whatever makes you happy when you are younger without a game plan for later.

It will be 100% worth it when 65 year old you is sitting on a fishing dock at 11:00am on a Tuesday without a care!

Monitor Your Credit Report

The next step is to check your credit score and look for patterns of poor spending and repayment.

I love using credit karma. It’s really helpful because its free and….well, they say it better:

“The first thing we do is give you free access to your credit scores, reports and monitoring. Once you know where you stand, we help you figure out your next move.

Maybe you need to dispute an error on your credit report. We could help with that. Maybe you’re paying too much in interest.

We could help with that too.We want you to feel good about your options and make informed financial decisions. That means giving you the right information at the right time so you can zero in on what’s important.”

You will get your credit rating from each of the three credit bureaus that report on most consumer credit—Experian, Equifax, and TransUnion.

Once you have the report and identify the accounts that are bringing your score down, be sure to rectify your mistakes.

Do this one day at a time. Only put out one credit ruining fire at a time, or you will feel overwhelmed.

Once you get a handle on what you need to do more or less of to raise your credit score, it becomes addicting to watch your credit score rise!

Look Into a Free Debt Counselor

 A free debt counselor can help you develop a budget that fits your lifestyle.

A debt counselor will provide many helpful tips and make sure that you’re on the right track with your repayment plans.

They could be really helpful in laying out all of your potential options. Stress and finances do not have to go hand in hand.

Prioritize Loans With the Highest Interest Rates

Prioritize loans with the highest interest rates and other helpful information. This way, you won’t be paying back more interest than you need to overtime. 

And a bit of my own advice…

If you don’t have the money to pay back your credit card in full at the end of the month, you have no business charging it!

 Is wearing the latest fashion trends and buying designer coffee, that’s slowly killing you due to all that sugar and whip cream, really worth dwindling your bank account?

Stay On Top Of Your Credit Card Payments

It’s really easy to ruin your credit score if you continuously miss payments. This will make it more difficult for you to have a competitive credit score when you’d like to buy a car or home in the future.

Stay on top of paying things like your credit card bills and medical bills each month. Go ahead and put a monthly reminder on your phone so you can pay these things right away.

A sure way to ensure you don’t forget to pay pulls is signing up for auto-payments so you don’t risk forgetting to pay a bill and further damage your credit score.

Freeing yourself from the burden of financial stress is very challenging for millennials these days. Take it one step at a time and be realistic with what you are buying.

Only purchase what is in your budget and you won’t have a pile of debt to dig your way out of. Getting your finances in order is an important consideration for stressing less every day.

Stress and finances can part ways amicably if you follow these tips to dig your way out of financial stress.

Grab a shovel and start digging! It may seem impossible, but once you make progress you won’t want to stop and you’ll never look back.