
Millennials, also known as Generation Y, are currently facing significant financial stress.
With rising living costs, stagnant wages, and mounting student loan debt, many young adults feel overwhelmed with their finances.
So, how do you reduce financial stress and feel better?
In this article, we will explore the reasons behind the increasing financial stress among millennials and provide some practical tips on how to manage your money effectively.
Tip 1. Live below your means

Living below your means, or spending less than you earn, is a crucial strategy for reducing financial stress and feeling better about your money.
This is not as difficult as you might think. Most millennials are already prioritising buying quality over quantity and directing money toward experiences that matter, instead of ‘things’.
By leaning into a minimalist, approach to living, you direct money to that which is important and not just spending for the sake of spending.
This approach can help you live below your means and reduce financial stress.
Here are some simple ideas to get you started.
- If you are renting or setting up your home, look at items that pull ‘double duty’ and are functional like sofa beds, or dressers as bedside tables.
- Consider sharing options like cars, furniture, and DIY tools. Be creative, you don’t have to own everything immediately.
You can also live below your means and reduce financial stress with these suggestions.
- Know how much life costs.
- Set boundaries you can live with.
- Track your income and expenses
- Understand where your money goes to identify areas to save.
- Avoid lifestyle inflation.
- As your income increases over time, resist the temptation to upgrade every aspect of your life accordingly. Instead, focus on saving more or paying off debts.
- Cut unnecessary expenses
- Evaluate recurring bills such as subscriptions or memberships that you rarely use but continue paying for out of habit.
- Save before spending
- Rather than relying solely on credit cards or loans when unexpected expenses arise, prioritise building an emergency fund by setting aside a portion of each paycheck.
- Find a ‘linch pin’ behaviour that can save you money.
- Listen to this podcast to learn more.
- #337: Habits are Overrated, with Kristen Berman – Afford Anything

Tip 2. Don't forget about debt
One of the main sources of financial stress for millennials is debt. Whether it’s student loans, credit card debt, or mortgages, managing your debts effectively is crucial for reducing financial stress. Here are some tips:
- Create a repayment plan
- Prioritise paying off high-interest debts first while making minimum payments on others.
- Consider using strategies like the avalanche or snowball method to accelerate your progress.
- Check out our reel on the Facebook Page
- Avoid taking on more debt
- While having access to credit can be beneficial in emergencies, try to minimize new borrowing whenever possible.
- Focus on living within your means and saving for future expenses instead.
- Seek assistance if needed
- If you’re struggling with overwhelming debt, consider seeking help from a reputable credit counseling agency that can provide guidance and support in creating a manageable repayment plan.
- MoneyTalks is a free helpline you can call if you are struggling with money.
- MoneyTalks – Free, budgeting help, debt help
Your credit score plays an important role in many aspects of your financial life. Your score affects your ability to secure loans at favorable interest rates, rent an apartment, or even get hired for certain jobs. To keep your credit score healthy:
- Prioritize timely payments: Pay all bills and loan installments on time each month to avoid negative impacts on your credit score.
- Maintain low credit utilization: Keep the amount you owe relative to your overall available credit as low as possible. Aim for a utilisation rate below 30%.
- Avoid unnecessary inquiries: Limit applications for new lines of credit unless absolutely necessary since multiple hard inquiries can negatively impact your score.
You can check your credit score for free.
Tip 4. Stay Informed

The world of personal finance is constantly evolving, so staying informed about current trends and best practices is essential. Educate yourself by:
● Reading personal finance blogs and books.
There are numerous resources available that can provide valuable insights and tips for managing your money effectively.
● Following reputable financial experts
Stay updated on the latest news, trends, and advice by following trusted financial experts or organizations on social media platforms.
● Attending workshops or webinars
Take advantage of educational opportunities in your community to deepen your understanding of personal finance topics.
Click on the books to see more.
Conclusion
The financial stress millennials face is a growing concern. However, by adopting smart financial habits such as living below your means, addressing debt responsibly, maintaining a healthy credit score, and staying informed about personal finance matters, you can reduce this financial stress and feel better.
Taking control of your finances will not only improve your present circumstances but also set you up for long-term success.
Article by Kim Gabites (Inside My Money Founder)
www.insidemymoney.co.nz
Inside My Money is an online financial learning hub, that helps first home buyers increase their financial know-how and confidence.
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