Today, Millennials make up 1/4 of the United States population or a total of 83.1 million people. There are significant differences between our parent’s generation and millennials. We were the first generation to grow up with easy access to computers and the first generation of the internet. Most millennials prefer to live in urban villages, with lots of opportunities for connection and social interaction. We also grew up in one of the most tumultuous economic settings since the Great Depression. All of these play a part in how millennials approach financial planning for the future.
Even though millennials are more connected than ever before, we may also be the least informed generation when it comes to financial planning, how taxes and the stock market work and strategies for saving for retirement. This may, in part, be caused by the overwhelming amount of bad information that is circulated. It requires learning and asking questions and finding people who can provide credible knowledge of the subject.
Unlike baby boomers and generations before, millennials are not relying on pensions or Social Security for financial stability. The financial landscape has changed, which can be a scary thing for millennials planning for the future. One thing many boomers did well was focus on financial Security early in life. The systems that they used are different than what we have available today, and we have more opportunities to make money online or from a second job which helps, but planning early should still a regular practice. When the markets were less volatile for boomers, there was less emotion involved when investing. They were in for the long haul, a lesson millennials should adopt when saving and investing.
Older Generations assume that millennials are not interested in saving or planning for the future. This could not be further from the truth. The reality is, millennials want to learn how to save and invest, but the financial factors that millennials are facing are much more complex than our parent’s generation. Since college degrees are now the “cost of admission” for any great job, there is more student loan debt we have to pay off. There is also a lack of confidence in the stock market or traditional Investments since we have seen two significant market drops in our lifetime, one in 2001 and the other in 2008. In addition, millennials are facing what we call “sandwich stress,” meaning financial stress from the added responsibility of making sure our parents are taken care of into retirement, especially if they have not been planning, and the financial pressure of starting our own families. With the right strategies in place, millennials can reduce these extra stresses and start working towards financial security.
If you are wondering what you can do to start saving, here’s a tip. Align your spending with your vision. In episode three, we talked a lot about vision, so if you haven’t heard that conversation it’s worth listening to. Aligning your vision with your spending means looking at where your money is going and determine if that is the most important thing you want to be focused on. For example, if you want to travel more, but you are spending hundreds of dollars on clothing every month, you may need to reassess your focus. Remember to eliminate the things that you don’t need, delegate as much as you can and automate everything. By delegating and automating, you can remove some of the stress of financial planning. This can clear up space so you can focus on creative things, hobbies and passions, and overall create a better quality of life!
Have millennials lost confidence in traditional approaches to financial security? Dustin Granger CFP® thinks they are more attentive than ever to creating security. Listen to hear more: #worthitpodcast @DRGranger #Millennials Click To Tweet
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