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The 10-Step Millennial Money Guide to Building Wealth Thumbnail

The 10-Step Millennial Money Guide to Building Wealth

Saving for retirement, investing, and overall money management can be very intimidating. Most people don’t know where to begin and ask me, “What steps should I be taking now to start building wealth?” I outlined some of the steps I find the most beneficial for millennials to demonstrate that building wealth doesn’t have to be scary and that you can start today!

1. Build an Emergency Fund

This is the first step in your savings journey. It might seem like a lot, but it is a key building block to building wealth.

An Emergency Fund is exactly what it sounds like, it’s an account used in case of emergencies. This is money set aside specifically for large, unexpected expenses or in case you lose your job. 

This money isn’t for investing because you want to always keep it readily available. The first goal is to save your first $1000. This can be a struggle for many people. By saving the first $1000 you have made a huge step in the right direction.

Next, your goal is to set aside about 3-6 months of your monthly expenses in it, so you have a healthy cushion. If your income is more variable, like a sales position, 6-9 months would be a good idea.

Even though it can take some time, it’s crucial to start your wealth journey with an emergency fund so you have a safety net to fall back on. Without having one it can lead to one building credit card debt, taking out loans, etc. These types of events will set you back in your financial goals and hurt your overall progress.

 2. Pay off your high-interest-rate debts ASAP (and I mean ASAP)

Do you still have that one credit card you accidentally spent too much on in college? You try to pay it off monthly, but it seems like you’re not making any progress. Credit cards have very high interest rates often in the 20%-30% range. This can be detrimental to your balance each month, especially if you have a large amount to pay off. 

For example:

If you had a credit card balance of $5,000 and an interest rate of 25%, every year you add $1,250 worth of interest on top of the $5,000 owed. Meaning you now actually have to pay $6,250 to pay off a $5,000 balance. By paying this off as soon as possible, you avoid the interest building and end up saving yourself an additional $1,250 a year ($104 a month.) This money can now be used towards your savings or investments, allowing you to continue to build your wealth. 

In my opinion, when I say high-interest debt, I mean any debt which has an interest rate of over 9%.

 3. Take advantage of your full employer match

An employer match can be a great way to supercharge your wealth by using free money. Many employers want to help their employees build retirement savings by offering a match program in their 401k, 403b, Sep, or Simple IRA plan. 

Here’s how it works:

Let’s say your employer offers a dollar-for-dollar match up to 5% in your work 401k plan. If you decide to contribute 5% of your paycheck to your 401k plan, your employer will also match that by putting in a matching contribution of 5% as well. If you decided not to contribute to the 401k plan, your employer will not put in any money for you. 

By not contributing to the plan, you are losing free money that your employer is willing to give you. To avoid this, always ensure you understand your employer’s match and take full advantage of it. If you can, contribute the full amount of what your employer will match to make the most of the benefit.

 4. Invest in a Roth IRA

Now for those of you that are still not sure exactly what a Roth IRA is, that’s okay. Here’s is a quick rundown (or refresher) for you: 

  • A Roth IRA is a type of investment retirement account that allows money to grow tax-free.
  • Within a Roth you have the ability to have it just sit in cash, similar to a savings account, but most people invest the account instead. The most common being mutual funds or ETF’s. 
  • This account is normally used for money needed in retirement, which is why the IRS charges a 10% early withdrawal penalty if you take money out before the age of 59 1/2. (There are some exceptions, but for most withdrawals to come out tax-free, you need to be at least 59 ½ and have had the account for 5 years.)

Here’s an example of how a Roth IRA grows tax-free:

If you put in $100,000 over the years into your Roth and the account grew to $210,000 because your investments did well, you can now take out all $210,000 without having to pay any income taxes (hence being tax-free) This ends up being $110,000 you never have to pay tax on. Pretty cool right?

 5. Start building an HSA Account

HSA accounts, also known as a health savings account, is another underutilized investment vehicle. These accounts are a way to put money into a fund to use towards health care expenses in a tax-advantageous way. 

Here’s how they work:

Let’s say you put $2,000 into an HSA this year. Your taxable income, or the income you need to pay taxes on, will be reduced by $2,000. So, if you made $50,000, but put $2,000 in your HSA, your taxable income will only be $48,000 for that tax year. When you decide to take the money out of your HSA and you use it towards qualified medical expenses, like a prescription or doctor’s visit, you don’t have to pay taxes on the withdrawal. It’s a win-win. You get a tax benefit when you contribute as well as when you withdraw. 

Some of these accounts allow investing as well, and some employers even help match an HSA. Ask your employer if these options are available to you and be sure to take advantage of them. 

If your employer doesn’t offer one, you do have the ability to start one yourself. You just need to make sure you have a qualifying health insurance plan.

 6. Build a taxable brokerage account

Personal brokerage accounts are one of my favorite accounts. The main reason is that there is no 59 ½ age restriction to take your money out without a penalty (like a Roth IRA does.) Think of this as a glorified savings account, or a savings account with investing features included.

What tends to happen to great savers is they save so well that they build their savings account way past the 3-6 months of expenses needed for an emergency fund. They want to invest the extra money but don’t want to tie it up in a retirement account they can’t touch until 59 ½. They would rather use the money for more short-term goals, like purchasing a home or a new vehicle. This is where a taxable brokerage account can be great. It allows you to invest the extra cash from the savings and gives you the flexibility to take the money out when you need it.

 7. Start chipping away at your low-interest rate loans

Now that you’ve done a great job saving, it’s now time to start paying down your low-interest-rate debt. This is any debt with an interest rate of 7% or lower. These are things like your mortgage, a car loan, or student loans.

Now I know people have their own beliefs on how to pay down debt. Some people I’ve worked with don’t want to pay off their low-interest rate debt because they feel they can make better returns by investing that cash instead and others prefer to have no debt at all and want it all paid off ASAP. 

Both ways work well, but I personally think the best strategy is to pay down your debt while investing simultaneously. Almost like a lever. While you are working on paying down your debt, you should also be making monthly contributions to your investments. 

Use the strategy you prefer, but be sure to stick to the strategy or else your hard work won’t pay off

8. Max out your company’s 401k

Once your income starts to build you should be looking at ways to further your savings. This can be done by maxing out your 401k or 403b plan through your employer. Some people think that you can only contribute up to what your employer matches. This is not true. In 2023, if you are under 50 years old you are able to contribute up to $22,500 annually. This not only helps supercharge your savings rate, but also reduces your taxable income and saves you money on your taxes. 

9. Look for ways to increase your income

Millennials have received a reputation that we can’t build our wealth because we “buy too many lattes” or “won’t cut back on Netflix.” This is simply ridiculous. Cutting $5 here and $10 there is not going to help you grow your wealth. It’s the other side of the equation you need to be looking at - your income. By adding more cash flow to the equation, you’re going to have more flexibility to invest as well as do things that you enjoy in life. 

To increase your income, you can do things like negotiating your contract with your current employer, begin a side hustle like walking dogs, or possibly starting a business. 

Now don’t get me wrong, I’m not saying to go out and start a business and expect that you’re automatically going to be rich (even though that’s what all the TikTok videos show you.) Starting a business can be very stressful and reduce your income for years potentially. There is a reason many businesses fail in their first 5 years. If you are persistent though, it can be a great way to grow your income with no limitations.

Side hustles are another way to supplement your income. They can be anything you want them to be, but the most important aspect is that it should be something you enjoy. Since you will probably be doing this outside of your 40-50 hour work week, you will not be motivated to do your side hustle if it’s not something you enjoy. 

For instance, if you really like animals, you could be a dog walker or pet sitter when people go on vacations. 

Sometimes these side hustles end up becoming businesses themselves. The dog walker could end up running their own dog-walking business in the future. You never know.

 10. Align your money with your goals and values

Many people think Financial Advisors are there just to tell people to stop spending their money and Save! Save! Save! 

That’s just not the case. In reality, a good financial advisor really wants to figure out what you value and help align your money with those values. 

For example, I had a client that really enjoyed traveling with her family. When looking through her spending, it turned out she was spending a lot of her income at Target, and hardly any on traveling. When I asked her what she was purchasing at Target, she wasn’t really sure. This is not an uncommon occurrence. 

To help align her money with her values, we looked at ways we could reduce the spending at Target, and then took the extra money and started putting it in an account labeled “Travel”. 

This not only helped her do more of what she wanted to do, but actually reduced the anxiety she had about spending money on traveling. Now she had a place where her money’s sole purpose was for traveling.


Building wealth can be intimidating, but taking these steps is a great way to make substantial progress on your money goals. Start as soon as you can! Even if you only have an extra $20 a month to save, starting your wealth-building journey now is better than waiting. In 5-10 years, you’ll be glad you did. 

If you have questions about how to personalize this 10-step process so it works best for you, please reach out! My passion is helping millennials feel comfortable about money and their savings while easing their financial stress. We can talk about what your money goals are, where you’re currently at, and how we can work together to make a promising financial future for you. Send me an email!

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Vince Darling CFP®
Stonebridge Group
P: 651-464-2531

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