To achieve financial success, it’s critical to know what you’re aiming for. For many, their financial goals represent their hopes and dreams with money—the ultimate target.

While everyone’s goals will be unique to their situation, some goals may apply to entire demographics or generations. For millennials, here are 4 financial goals to help elevate their financial situation. Read on to learn more.

The Top 4 Financial Goals for Millennials.

1. Build an emergency fund.

The first step to financial success is to create a buffer between you and the inevitable curveballs of life. That buffer comes in the form of an emergency fund—a critical piece of every financial plan. An emergency fund is a safety net ready to catch you when you’re faced with an unexpected financial emergency. Without it, you become vulnerable to losses.

As a rule of thumb, most financial experts recommend maintaining an emergency fund of 3 to 6 months of living expenses, with 6 months being the default target. However, every situation is unique, so it is valuable to consider your situation and evaluate the following:

• How stable is your current career or industry—are you in a high-risk industry where layoffs are common?
• Do you have a partner or spouse with a similar income?
• How stable is their career? Is your income reasonably steady, or does it come in sporadically?

Based on your answers to these questions, you may decide that 3 months is plenty, or you may decide you want to build a year's worth of expenses. Whatever the case, the big takeaway is to create a financial buffer between you and the unexpected.

2. Clean up your debt.

Once the emergency fund is in place, it’s time to attack your debt. According to Experian’s consumer debt study, the average millennial has roughly $87,000 in consumer debt and averages the following:

• Credit card debt: $4,332
• Student loan debt: $38,877
• Auto loan debt: $19,011
• Personal loan debt: $12,306

Cleaning up existing debt can be critical as millennials enter their 30s and 40s—a time when many are buying homes and becoming parents for the first time. Unfortunately, existing consumer debt has put a squeeze on the typical millennial’s budget, forcing many to delay their goals of homeownership and parenthood.

There are two tracks you can take when attacking your debt: one is mathematically superior, and one is behaviorally superior.

The mathematically superior approach is to start by paying off the highest interest rate debt first—known as the avalanche method. This will save you the most money in interest payments as you clear out high-interest debt first, typically starting with credit card debt, then personal loans, then student loans, then auto loans.

The behaviorally superior approach is to start with the smallest debt balance first—known as the snowball method. This method allows you to generate momentum early as you quickly eliminate the smaller balance debt and snowball the payments onto the next smallest debt.

Deciding which method to use comes down to knowing yourself and what motivates you. Using anything other than the mathematically superior approach would be heresy for some. To others, the small wins early on with the snowball method would be what they need to get the job done. If you can’t decide, don't be afraid to try both ways to see which you like best, and remember, it’s personal finance, so you do you.

3. Improve your credit score.

Improving your credit score goes hand in hand with cleaning up debt. This is where you can begin to elevate your financial situation and take things up a notch. Also, improving your credit score can be critical if you plan to buy a home in the near future, as your credit score will determine the terms of your loan, ultimately affecting your interest rate.

According to Money.com, the average credit score for millennials is 667.4—roughly 27.9 points lower than the U.S. average of 695.3. Notably, millennials saw the highest increase in points of any generation from 2019 to 2021, almost reaching the “good” territory after increasing nearly 11 points.

The first step is to review your credit report, either using a free credit score app or ordering your free annual credit report from annualcreditreport.com. Next, consider how the following breakdown affects your score as you review your report.

Here is a breakdown of the FICO score, which 9/10 lenders use:

• Payment history (35%) Making payments on time will improve your credit score.
• Credit usage (30%) Using less than your total available credit is a good sign.
• Age of credit accounts (15%) The older your accounts, the better.
• Credit mix (10%) Having different loan types can be good for your credit.
• New credit inquiries (10%) Avoiding too many recent credit requests can improve your score.

Once you know where you are currently and what factors impact your score, it’s time to adjust. By making your credit score a priority, you are well on your way to improving your score and accessing the best loan terms and interest rates available.

4. Save, save, save.

Last but not least, it’s time to save. According to a study by Next Gen Personal Finance (NGPF), 45% of millennials surveyed said that increasing the amount they save for retirement is their top financial goal.

Everyone’s savings goals will differ depending on their unique financial and lifestyle goals. Some will be saving to buy a home, others will be saving for early retirement, and some might be saving for a luxury vacation. There are no right or wrong answers regarding what you’re saving for.

When it comes to saving, consider paying yourself first and automating your savings. Paying yourself first means that rather than spending first and saving what is left, you flip the script, saving first and spending what is left. While this can seem like a minor difference, the change in outcomes can be immense, as you are prioritizing your savings goals, ensuring they will happen.

Second is to automate your savings. This can be a critical step towards achieving your savings goals as you move away from relying on yourself to decide to save each paycheck and towards automatically saving each paycheck. This is another minor change, but it can make all the difference in your savings outcomes.

Range is here to help.

With Range, you can connect all your finances into a single dashboard to track, monitor and plan the best version of your life. Say goodbye to middlemen and spreadsheets and hello to the new financial you.

Get started with Range today