What does the financial future of Millennials look like? Does it look like a glass of our favorite Rosé or does it look like that half an avocado your forgot in the fridge? We are a generation with mountains of student loan debt, high unemployment for our age group and stagnant wages at the start of our earning years. We want to pay down debt, buy a home and save for retirement. These are incredible challenges. However, I am optimistic that we can overcome them. We can reach our goals! The situation doesn’t have to seem as dire if we act now. We need to start securing our future because no one will do it for us. We need to be willing to make sacrifices to achieve your goals. For some that may mean waiting to buy a home for a few more years. Or maybe it’s give up cable (if you haven’t already) to save more into your 401(k). With so many Millennials projecting the Instagram version of their lives, keeping up with the Jones’ is getting even harder (and I gave up on the Kardashian’s a long time ago). Remember that social media shows everything through a filter, both literally and figuratively. Have discipline to know what goals you want to achieve and don’t let that Valencia-filtered vacation pic distract you from what is really important.
Two of the big obstacles our generation has to overcome are the lack of financial literacy and debt. Personal finance is not taught in schools at any level and most parents don’t talk with their children about it. It is still seen as a taboo subject to many people. Because of our lack of education and lack of communication surrounding personal finance, we are making decisions in a reactionary manner. We learn whether a choice was wrong or right after the fact, and after is too late. By then the consequences may seem insurmountable. Instead, we should be making proactive educated choices.
However, many of us did make decisions with negative consequences that we are now tackling. The rising cost of education caused many of us to take out student loans and amass more student loan debt than any generation before us. And because of the lack of financial literacy, we took out those large amounts of student debt without knowing how we were going to pay it back. We made the decisions and are suffering unfortunate consequences of trying to figure out how we can repay the debt while trying to reach our long term goals and still live a comfortable lifestyle. But you can tackle the debt one step at a time. Here is where you should start:
- Take ownership – Don’t worry about how it got there just do something. Get over the emotional hurdle of debt.
- Identify and prioritize your goals – What do you want in life? Is it financial independence? To own a home? To start a business?
- Make a plan – Work with a professional or do it yourself to create a plan to pay down debt along with reaching your other goals.
- Implement the plan – There is no silver bullet. It will take hard work to tackle debt. You need to have a burning desire to achieve your goals.
Having a plan is the key to success. This applies to your career, your family and your finances. For many of us, we are planning for retirement or as I call it: financial independence. But, our vision of financial independence is different than our parents. I believe that financial independence is a point in life where work is optional. Many of us love what we do in our careers and may not want to give it up later in life, but we would like the option. Eventually, we may want to spend more time with family than at work. If you plan now and establish your goals, then you can figure out how to achieve them given your resources. Millennials want to save and know that it is important. We all have to start somewhere, so start thinking about what you want in life now.
I am optimistic about the future of Millennials and the generations after us. I hope that younger people will be more selective about how they choose education. I hope that they educate themselves on personal finance so if they choose to pay for an expensive education, they know how they have to deal with it when they graduate. I want them to know how much they need to make to service those loans with a reasonable lifestyle. I think all of us should make a plan, and having a plan B isn’t a bad idea either. And because we are living healthier lifestyles, we may live longer than generations before us which means needing a stronger plan for the later years in life. I am encouraged by what Millennials can bring to the economy. We are taking it upon ourselves to secure our own future by creating businesses that are fueled by our passions. We are investing in ourselves and hoping the reward is worth the risk and I think it is!
If this blog post has you fired up, then get excited for our book, The Millennial Money Fix, which comes out this August. You can pre-order yourself a copy today.