Millennials, I have good news for you! Studies are showing that we are better at tracking expenses and sticking to a budget than Baby Boomers. This is what I like to hear. More of you are saving for your future which I think can be attributed to an improving job environment and strong entrepreneurial spirit. Our jobs have improved along with our salaries so we have the capacity to save for retirement. The business we have started have grown and we can now turn those profits into retirement savings. The hard work is paying off Millennials.
However, there is still some bad news. Some of you are still holding yourselves back from achieving long-term growth because you feel you lack the knowledge and confidence about investing for your future. By shying away from investing, you may be reducing the amount of wealth you can accumulate over your lifetime. Every generation underestimates how much they need to save for later in life, but time is on your side. As Millennials, we have many years before retirement so if we start now, we can improve our outcomes. Here are 3 steps to get savvier about your long-term savings:
- Prioritize your financial goals. This is always part of the first step (Identify, quantify, prioritize – and if that means nothing to you read this). What does your 5-year plan look like? What about 10 years? Along the way you will have to make decisions about your financial goals. For some this means having to decide between saving for retirement vs paying off debt or saving for a house. You must decide what matters most to you, but don’t forget about what you can do today as well as down the road.
- Increase retirement savings annually. I’m so glad that more Millennials are saving for retirement but make sure you continue to save and save more. Time is on our side so take advantage of it. Set up a way to save regularly now to establish the habit. When you get a raise, put more of that money towards your goals. If you can’t afford to save today, that’s okay. You will get there. Just keep your head down and apply yourself. Remember, nothing worth doing Is easy and hard works pays off.
- Seek professional financial advice. I encourage Millennials to seek advice through a professional if needed. There are lots of resources and tools out there along with professional help that can make sure you are on the path for a successful financial future.
These are just a few steps that may help to turn bad news into good news. Even if you can’t save now, you can start with Step 1. Eventually you will be able to save and if your plan is already in place you will be ready to go. Don’t wait because time is a great asset. Many of us saw so many terrible financial events early in our working years so we know we have to take retirement savings into our own hands. The more we talk about it now, the greater financial education everyone will have and that is always a good thing.