Each generation seems to think the next generation is less prepared and doesn’t appreciate what they have. In reality, each generation is changing and evolving to its surroundings.
Time described generational issues, “The young seem curiously unappreciative of the society that supports them. ‘Don’t trust anyone over 30,’ is one of their rallying cries.”1 Surprisingly, this was printed in 1967.
Millennials–those born between 1981 and 2001–are the generation that will be required to forge financial success without a pension. As investors, they need to redefine their landscape. These are some common Millennial financial mistakes:
1. Not having a proper emergency fund: When you don’t have an emergency fund, every little unexpected event is a catastrophe. Paying with credit cards is easy, but hard to pay off. Avoid this trap by having an emergency fund of three to six months of living expenses readily available.
2. Forgoing the employer retirement match: About 75 percent of millennials are saving in their employer retirement plan; however, only 40 percent take advantage of the full company match.2 Those are free dollars that can help fund a retirement.
3. Holding onto debt: Student loans and car payments seem to hang around for way too long. Most people can afford to pay off debt faster than the minimum payment yet choose not to. Paying off fixed monthly payments frees up money that can work for you, instead of against you. Get aggressive and start to chip away at that debt.
4. Not using a financial advisor: A financial advisor can help you dream with numbers. Between work, social commitments, and family, most millennials don’t have time to focus on their finances. Financial advisors are here to help and work with all ages, incomes, and stages in life. We can create a plan and help you work toward making it a reality.
(1) Time Magazine, 1967