More than half of Gen Z surveyed in a recent report found that making small daily purchases such as a cup of coffee will have a long term impact on their finances, according to CNBC.
This speaks to a fear young people have about their financial future and how their current money moves impact it. But how can one help ease those fears?
Create an emergency account
A rainy day fund can help amid unexpected expenses that could jeopardize financial health. It might be used to replace a damaged car part or pay for a medical procedure.
Keeping your emergency fund in a high-yield savings account can help your balance grow faster. You’ll be paid interest each month for maintaining a balance.
Pay down debt
Gradually erasing debt can allow for more flexibility when tough circumstances arise. Some use the debt snowball method to do so, which involves eliminating the smallest debt balance first while paying the minimum on other debts. Seeing the smaller balances disappear could keep you motivated as you tackle the largest balance.
Others turn to the debt avalanche method. It involves eliminating your highest interest debt while making minimum payments on the others, working your way down to the debt with the lowest interest rate. The method helps you save the most on interest charges.
Invest in stocks
Investing can help your money grow over time even when you aren’t contributing additional dollars to your balance.
There are some apps that allow users to invest spare change that’s left over from everyday purchases.
Consider making contributions to a Roth IRA, which are great for retirement and can help you build wealth over the long term.