The Internet, smartphones, and other net-connected devices and gadgets have ushered in a sweeping change to youth culture. Millenials–the generation born after 1980–are part of the “now” culture. They are quick to act on their emotions, which leads to many amazing discoveries and opportunities. Unfortunately, it also leads to whimsical decisions that cost them money.
Millenials, with their focus on what’s happening “in the moment”, have potentially created a disastrous chain of events by not preparing for the tough financial decisions later in life. The importance of responsible personal finance often eludes them.
If you’re reading this, now, and feel you fit this bracket than sit up and take note; all others take these items into account to pass this information to those in need:
1. Retirement WILL Happen
The energy one has today won’t be there once age begins to set.
Retirement will happen and failing to prepare could mean the later, “golden” part of ones’ life could be stressful and lackluster due to financial constraints, health problems, and a lack of mental well-being.
Couple in the fact that many individuals in college (or planning to attend) face a difficult challenge due to potential student loan debt and resistance in the workforce, and one will quickly see that the future may pose a very difficult task of saving for retirement.
For this reason, it’s recommended that Millennials should educate themselves by using a tool like an online retirement calculator to begin preparing for the later years of life. The calculator takes into account a variety of factors such as age, investment style, savings goals, and social security outlook. It will use these factors to analyze and give a report of what one should expect based on their current understanding and what needs to be done to reach retirement goals.
Millennials, you may feel invincible now, but time catches everyone. Burning through a paycheck over the weekend is fun when devoid of responsibilities, but there will be a time to act mature and retirement is one such subject that needs to be on the table.
2. Don’t Rely on College
Millennials reaching the end of their stints in college (or those just entering the workforce) have an uphill battle ahead of them. The combination of higher demands by employers (such as work experience), growing debt brought about by student loans, and a rocky employment outlook has created a toxic environment that will cause stress on the individual, companies, and the economy.
There are a few underlying problems that are present:
· There is a perceived notion that you must attend college despite not having a clear idea of what you’d like to study.
· Companies have significantly cut back on hours and many have outsourced their labor overseas.
College will certainly provide an environment to grow as an individual; accreditation and having a diploma will open many doors, but failing to understand whether one actually needs to do college will result in post-graduate confusion and debt (which is very common, these days).
College should not be a crutch for finding a career. Millennials should use their spare time to explore many different avenues whether it’s in the arts, entrepreneurship, community outreach, or networking.
College will certainly provide many opportunities to land the job; with stiff competition and a growing list of demands in part by companies, they should seek other forms of education and growth.
3. Letting the Guard Down
Any older individual can tell you that the younger generation will almost always have a sense of invincibility. The quest for instant gratification places many Millennials in the face of danger (often for entertainment purposes).
· Failing to take care of ones’ health can lead to bigger problems later in life.
· Failing to create a budget and manage money can lead to financial stress.
· Failing to know ones’ limit can lead to poor decisions and negative outcomes.
At its core, an emergency fund will often take care of many problems that may arise throughout the early 20’s and 30’s these Millennials may face.
The smart decision, on the behalf of those within this culture, is to simply avoid taking actions in areas such as finance, health, and mental stability which may lead to long-term harm. However, an emergency fund acts, in some fashion or another, as a safety net for the unexpected.
These items may include:
· Sudden car troubles (which may also effect work and school performance)
· Unexpected health issues (dental, broken bones, prescriptions, and others)
· Outrageous interest rates caused by irresponsible credit card use
A general rule of thumb is to build an emergency fund equal to what one would need to survive for three months but even a small amount, such as $1,000, is more than what many are stashing away.
The best course of action is to assess one’s lifestyle and begun cutting back on the expenses that may cause the various troubles detailed above; take the money and set it aside for a rainy day.
Millennials may be quick in the mind and very creative, but when it comes to finances a lot of individuals fall flat. Understanding the inherent risks involved with living “in the now” will be humbling and will, at least, curb potential disasters later in life.