Millennials boarded the world ship during the Great Recession, and they witnessed their parents lose a ton of money in the stock market and real estate. Therefore, like children who grew up during the Great Depression, the down economic times triggered more conservative financial notions than the generation before them, Generation X.
The youngest millennials, ages 20 to 30 years old, have struggled through a difficult job market. They also accumulated hefty student loan debt, have a mistrust of investments and real estate, and do not have much expendable income. In fact, nearly half of millennials admit to “treading water” financially, and one missed paycheck would spell doom for them. Millennials are uncomfortable investing and less likely than other generations to invest in the stock market.
On the other hand, they are committed to financial independence and are optimistic about the future.
There are basic steps that millennials, and any generation, should take to better position themselves financially as they settle into homes and start families:
- Avoid credit card offers, and if you decide to get one for emergency situations, pay the balance every month to reduce interest fees, especially if you have student loan debt. In other words, do not get into more debt.
- Open a savings account and commit a portion of each paycheck to the account. Instead of a dollar amount, use a percentage, so that when you get a raise, the amount you deposit automatically increases.
- Get comfortable with investing. Find a sound financial adviser and start with small, fail-proof stock investments that are sure to make money, though not much.
- Maintain a budget, and if your lifestyle has to change to accommodate it, then downsize your wants, focus on your needs, or make more money to finance the personal life you want.
Moreover, embrace your earning power by showing initiative and being aggressive as you pursue higher-income employment with excellent benefits. These jobs will NOT find you; you have to get out there and do the work. If it helps, imagine your future and create goals to get there. While retirement funds and insurance are boring subjects, they will eventually help you find a sustainable future.
