The new year. A time for a new you and to make new moves!
It’s a time of transition. Some are preparing to make that move from employment to entrepreneurship or from renter to homeowner or even both.
Becoming your own boss or picking up a side hustle is no longer an option for most of us living in The Mile High Income City if you’re making anything below six figures. With the cost of living 12% above the national average and housing sitting even higher at 32%, having multiple streams of income is now on the priority list.
The housing market is rumored to slow down in 2019 but with 45% of home seekers being millennials whose typical budget for a new home range from 150 to 200K that may not necessarily be a good thing. The median cost for a home in Denver is upwards of $300,000 so in retrospect this only means the inventory is available for buyers that can’t even afford to buy! The struggle is real!
What are the top 3 challenges millennials face in 2019?
- Student Debt
- Home Cost
- Slow wage growth
The age range of a millennial is from 15 to 35 highly consisting of college graduates and new family starters that are introduced to financial struggles right out the gate. Student loans mean on average roughly $40K in debt and most companies barely pay a wage to cover that let alone run a household or build any kind of legacy for yourself. If you don’t know the proper strategies you will be drowning in debt before you know it. Learning financial strategies and implementing them in your life over working a side job will free up money for paying down debt, open the door for investing and frees your time so that you can focus on building that business you’re going to be super successful at.
4 Income Shifting Strategies I use on my road to the new me in 2019
Correct Tax Withholdings
1.) I corrected my tax withholding. Just like you I never understood how to correctly fill out my W4 when they gave it to me at my job. I would count the heads in my house and that was my magic number for taxes being withheld from my payroll. When money got tight I would run to HR to adjust my form to exempt not realizing the long-term effects of my lack of knowledge. I recently learned the difference between deductions and allowances and I had been ignoring the allowance portion of the W4 therefore giving away to much of my personal cash flow to the IRS eliminating my opportunity to invest money that was mine to begin with. After making adjustments to my W4 I was able to bring in an extra $200 per paycheck by filling it out correctly. (Download W4)
Smart Credit Repair System
2.) I learned the smart credit system. I learned how to repair, build and maintain my credit. Again, when it comes to bringing extra money into the house we often think along the lines of getting another job. In today’s world Cash is no longer king and we simply do not have the time to be working 3 jobs. Credit determines everything. How much interest you pay on loans, your down payment on a new home even if you can get a job or not. With credit being so vital it is reckless to continue to ignore!
Generate Business Income
3.) I started a small home based business to minimize my tax liability. There are so many privileges to being a small business owner. The trick is not in the knowing its in the understanding. I now understand that with a home based business I can keep track of everyday household expenses and make deductions accordingly at tax time. Things like gas, automobile payments and maintenance are now tax deductible. My cell phone and internet bill are now tax deductible, travel expenses and even my kids allowance becomes tax deductible because they are now earning wages from my home based business by completing their every day chores.
4.) Getting the monkeys off my back is the fourth but most difficult task for me because I like to spend money on frivolous things and with so much more cash flow generated within the past 3 months of implementing these strategies it’s hard not to do the things that pleasure me. Eliminating debt comes with discipline, great will and a method called the snowball effect. Now your cash flow is looking like an extra $1000 per month, take that money and apply it to a 30 year debt and have it payed off in 91 months not only eliminating the debt but saving yourself from high interest payments you would have accumulated over those 30 years. Then rinse and repeat for all your debt until you are totally debt free.
As a millennial looking to build your financial future these financial strategies could be the blueprint you need to get started on the right path. Conquer these four very basic strategies and not only free up your money for things like new home purchase, small business success and financial freedom but also give yourself a starting point for investing to watch your money grow and create residual income for yourself and a legacy you can be proud of. I recommend not taking the journey alone, one key to being successful is to surround yourself with like minded individuals that are on the same journey you are on for support and accountability. My team is called The Financial Empowerment Educators and we are always looking for those individuals seeking financial success!