Millenials and Money - What You Need to Know

If you’re a millennial, then you are living in a vastly different world than the one your parents inhabited. As such, all of the tips and beliefs that they have handed down to you about how to handle money may not be entirely accurate. This is not to say that all the principles they’ve taught you about money are incorrect, but you should be aware that there are certain “modern money” tips that apply more to millennials than they did to past generations.    

Save (More) For Retirement

First things first, there is a good chance that when retirement time comes around, you are going to need more money than your parents did. Not only are costs always rising due to inflation, but the amounts of social security income people can expect in retirement are getting lower each year. Plus, people are becoming eligible for social security later in life than they did in the past.

As a result of these things, you will want to start saving earlier and more aggressively than your parents probably did. Opening a 401(k) and/or an IRA account as soon as possible and making regular contributions to it is a good step to take. It’s also not a bad idea to meet with a financial adviser who can take a look at your finances and help you develop a good, workable strategy for saving adequately for retirement.

Save (More) Money

Your parents probably had a savings account or some kind of “nest egg” for those just-in-case  moments. You need a savings account too, but, as expected, it likely needs to be a bit bigger than the amount that your parents saved.

Make sure you have a solid emergency fund in case you get laid off, have an unexpected expense, or go through some other costly event.  In addition to your emergency fund, you should also save “just because.” This way, you’ll have money that you can fall back on as needed or use to make a big, important purchase, such as buying a house or car.

Live on a Budget

Finally, even if your parents didn’t live their lives by a budget, you should! Budgeting is a great skill to have and can make managing your life and your finances so much easier. The sooner you get into the habit of budgeting your money, the easier it will be to have and maintain financial stability. If you’re not sure how to make a workable budget or if you could really just use some financial help in general, remember that financial advisers are always a smart way to get on track!