If you’ve been on social media, you’ve likely seen TikTok videos that ask the question: “What advice would you give your younger self?” For millennials, that’s a question they should ask in reverse. Ten years from now, you’ll likely wish you’d made certain financial moves today. Luckily, experts say we don’t have to wait for hindsight. We can take advantage of their advice to set ourselves up for future success.
“Those reaching their 30s are often beginning to hit their stride professionally,” said Larry Mathis, certified financial planner (CFP), founder and CEO of Mathis Wealth Management.
“These individuals should focus on putting as much as possible into 401(k), 403(b), IRA or other retirement savings accounts, as well as other employer-sponsored savings plans that may be available,” he said.
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He explained that the period when your earnings are starting to ramp up is the best time to solidify the savings habit and to begin making smart investments that can grow faster than inflation and provide for long-term growth.
“By this time, investors in their 30s should also be getting serious about educating themselves in the fundamentals of investing and the financial markets — which doesn’t have to be expensive,” Mathis said.
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According to other experts like Mathis, mid-career investors should also seek investments that have the best chance of outperforming inflation over the long haul.
“I can’t stress enough the power of starting early with stock market investments,” said Justin Godur, CEO and founder of Capital Max. “At 25, I made my first investment and the compounding returns have been extraordinary.”
“Many millennials hesitate due to fear of market fluctuations, but even small, consistent investments can grow significantly over time,” he said. “Imagine your future self thanking you for the financial stability and growth achieved through disciplined investing.”
“A focus on stock funds and ETFs can position them for the long-term growth they need to avoid falling into an underperformance trap that could leave them lacking the necessary resources for a satisfying retirement in future years,” Godur said.
“An emergency fund is a financial safety net that can prevent unexpected events from turning into financial crises,” Godur said. “I recall an instance when unexpected car repairs could have derailed my budget.”
“Thanks to my emergency fund, I managed without dipping into my investments or taking on debt,” he said. “Aim to save three to six months’ worth of expenses to cover unforeseen circumstances.”
Rhett Stubbendeck, CEO and founder of Leverage Planning, said the same. “Life is unpredictable and having a financial cushion can prevent stress.”
“I believe in setting aside three to six months’ worth of living expenses,” he said. “A client of mine faced unexpected medical expenses and was grateful for her emergency fund. It kept her out of debt.”
“As your income grows it’s tempting to spend more,” Stubbendeck said. “But maintaining a modest lifestyle lets you save and invest more.”
“I had a client who kept his expenses low despite salary increases,” he said. “He invested the extra money and now has a substantial portfolio.”
According to Stubbendeck, millennials should focus on paying off high-interest debt. “Credit card debt can become overwhelming,” he said.
“I advised a client to aggressively pay off her credit card balances,” Stubbendeck said. “She used the snowball method and became debt-free faster.”
Experts equally recommend getting adequate insurance coverage.
“Health, disability and life insurance are crucial,” Stubbendeck said. “I had a young client who thought life insurance was unnecessary. After discussing future plans, he secured a policy and felt more secure.”
“Even if you don’t have dependents, securing a life insurance policy while young can lock in lower premiums,” said Ben Klesinger, finance executive, co-founder and CEO of Reliant Insurance Group and Helping Hand Financial.
“For instance, a 30-year-old non-smoker could pay significantly less for a policy than someone who waits until 40,” he said. “If you’re a business owner, consider key-person insurance to safeguard your company against unforeseen events.”
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Klesinger recommended implementing a comprehensive risk management strategy for any business venture.
“Prioritize risk reduction through regular reviews and updated safety policies, which can mitigate potential losses effectively,” Klesinger said. “For instance, revisiting employee training programs can prevent accidents and reduce insurance premiums in the long run,” he said.
Mathis suggests doing so by attending free seminars and getting in the habit of reading or listening to the financial news.
“And even regular coffee appointments with a savvy friend can help with more confidence and basic investing knowledge,” he said.
“Retirement may seem like a distant concern, but maximizing contributions to retirement accounts such as a 401(k) or IRA early on can dramatically impact your future financial comfort,” Godur said.
“I’ve consistently contributed to my retirement accounts, benefiting from employer matches and tax advantages,” he said. “The growth over time ensures I won’t be financially strained during my golden years.”
Erwin Vico, CEO of Slick Cash Loan, said many millennials aren’t going to get pensions like previous generations did when they retired.
“It’s on them to save up for themselves,” he said. “While some expenses get smaller when you retire, like housing costs if you downsize or pay off your mortgage, other expenses get bigger, like health care.”
“You never know what your future will look like, so the best way to prepare is by saving as much as you can now,” Vico said. “The earlier you invest in retirement accounts, the longer your investments will have to grow because they’ll earn compound interest.”
“Investing for a long time can also help reduce the effect that market volatility has on your overall returns,” he said.
Overall, according to experts, all of the above steps — like investing early, building an emergency fund and maximizing retirement contributions — are foundational moves that every millennial should make.
“They’ve significantly impacted my financial well-being and can do the same for you,” Godur said. “Don’t wait until it’s too late; your future self will be grateful for the proactive steps you take today.”
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This article originally appeared on GOBankingRates.com: In 10 Years, You’ll Wish You’d Made These 8 Financial Moves Today
