When it comes to managing finance for millennials, time plays a very crucial role. The sooner you start managing your resources and income, the better preparation you’ll have for the future. On the other hand, if you start late, the amount of money you will need to save and the amount of money you will have to invest will take up a very large chunk of your income. Also, saving later is harder as the cost of living is expected to rise.

Here are some useful tips that will help millennials in managing their finances successfully:

Start tracking your expenses
You need to stop living paycheck-to-paycheck. In order to do this, you must make some cuts in your expenditures. Start tracking your weekly expenses, even if it is only a couple of dollars. When you thoroughly understand your expenses, you’ll get an idea of how much you need to reduce spending in order to save up some money. This way, you will actually have good money left with you before the next paycheck comes in. This can help save you from credit card debt, which is a major challenge when it comes to managing finance for millennials.

Have emergency funds
Put at least three months of your income aside to meet any untoward and unprecedented expenses. You can put this amount in an account that yields a higher interest rate than a traditional savings accounts. To get a head start, you can start saving small amounts monthly. You can even seek help from a financial planner to get you started.

Put money in retirement accounts
You can either put aside your entire salary or an amount up to which is considered tax-free in your individual retirement account. Every $500 that you save now will be worth almost $6000 around 45 years from now. The later you begin, the lesser you save.

Make diversified investments
At some point, the market may fluctuate. If you have made diversified investments, you can minimize your losses. The best part about being a millennial is that you are young and you have time to recover from losses. When the market falls, there is nothing to worry about. Just sell your mutual funds and think of ways in which you can recover the loss. Also, investing by diversifying in broad-based stock mutual funds helps cut risks. As a precaution, avoid investing in market fads that you do not understand as these can often result in dead ends. For instance, cryptocurrencies are a good investment only if you fully understand how they work.

Get term life insurance
Many millennials still struggle to keep enough money aside to meet the basic needs of their family. In such cases, it is important to get a term life insurance. This will ensure the financial safety of your family in case of an unforeseen tragedy. Remember that purchasing term life insurance is cheaper when you are young. You might also want to make an estate plan for better future planning.