There's been a lot of talk about Millennials and money recently. This generation is saddled with historically high amounts of college loan debt and in many areas facing prohibitively expensive housing costs. They came of age at the turn of the millennium at the crest of some major financial challenges. The good news is that while financial realities have changed, the fundamentals of healthy financial planning haven't.
Keep Your Chin Up
Here's my single biggest piece of advice to Millennials: Don't panic. Gloom and doom sells newspapers, so most of the articles you'll see on young people and finances focus on frightening statistics. Some alarming numbers look far less frightening when you take a more analytical and less sensationalistic view of them.
For example, when the Consumer Financial Protection Bureau published a report on the spiraling cost of education and noted that students have collectively amassed $1.2 billion of debt, the paper set off a wave of articles about the pitfalls of paying for higher education. Meanwhile, information about how well Millennials who graduate with a degree fare compared to the general populace created no more than a ripple. While it's certainly true that college costs more for Millennials than for previous generations, the impact of that education is still powerful.
Make A Plan
Statistics can paint a big picture, but that image lacks detail. Even if half of your Millennial peers use credit on a regular basis to buy necessities such as groceries as an Investopedia overview describes, that doesn't mean you should follow suit. It's possible (and beneficial) to live debt-free even as a young person, all it takes is judicious planning and the conviction to stick to your decisions and follow through.
Make a thorough and clear-eyed financial inventory that takes your individual goals into account. What's meaningful to you, and how can you achieve it by investing and budgeting wisely? Do you want to allocate part of that budget to saving for a house, traveling frequently, retiring early, going back to school, or entertaining friends and family? Those are questions statistics can't answer. The big picture is valuable only so far as it relates to your unique and personalised choices and goals.
Keep Learning & Apply Your Knowledge
My other advice to Millennials involves education – not the kind that incurs debt but the sort that comes from your own research. From big-ticket items such as cars and homes to everyday buys at the grocery store, most choices have a price range, not a single set cost. For example, organic food costs between 10 and 30 percent more than conventionally produced foods. About a quarter of Millennials surveyed plan to spend more for organic foods over the next year than they did this year. While that might not seem like much on a weekly grocery bill, it could add up to $1,500 or more per household by the end of the year. That's a big financial commitment to make, and it's why I recommend learning about your options so all your financial choices are informed ones.
A certified financial planner is a great resource at any stage in your life, whether you're negotiating college loan payments, looking to buy property, or saving for retirement. A good planner will listen to your unique needs and goals and help you develop the strategy that's right for you. There's no need to go it alone when making big decisions that impact your financial future.
Every generation has its own challenges. College debt, spiraling housing costs, and recession recovery can't dampen the natural resilience the newest working generation has already shown. With experienced financial guidance, personal budgeting and goal-setting, and an optimistic outlook, Millennials have every reason to look forward to a bright financial future.