A 2018 report from Bank of America revealed that one in six millennials — those born between 1981 and 1996 — is sitting on $100K or more in savings. Impressive, right? That is until you consider other surveys by LendEDU and GoBankingRates, which respectively found that 49 percent of millennials spend more on coffee than they save toward retirement, and that nearly half have nothing in savings at all. Zero dollars.
There’s a lot of confusing information out there, and as more millennials trickle into our client list at Bartlett Wealth Management, we’re interested in learning more about the debt management and spending habits of this dynamic group. Though we tend to focus on individual financial picture, characteristics of the “millennial experience” give us hope that this generation can defy its financially frivolous reputation and achieve solvency.
And since many Bartlett advisors are ourselves members of the millennial generation, we’ve come up with a few simple strategies to leverage the strength of our combined experiences and set ourselves up for future financial success.
Strength: We’re the world’s first-ever digital natives.
There are many advantages (and admittedly some disadvantages) to having grown up with computers, cell phones, and the Internet at our fingertips. As the digital world continues to evolve, we have a head start on things like big-picture expense tracking, automated savings, and credit monitoring.
Use it: Digital tools like automatic transfer and debit card-linked “round up” apps allow you to pay yourself first by allocating money each month toward savings or debt reduction.
Strength: We know hard times.
Previous generations might scoff, but millennials have seen our fair share of hardship — after all, we came of age in the era of 9/11, and we have the unfortunate distinction of graduating college just in time for the Great Recession.
Use it: Leverage those experiences in your financial life, and make it a goal to consistently have enough savings to cover up to six months of expenses if it becomes necessary.
Strength: We’re not afraid to job-jump.
Because of those aforementioned life lessons, millennials have a different relationship with our careers than past generations. For us, no job is forever, and we’re comfortable moving around within our field until we find the right arrangement.
Use it: This fearlessness can be a great advantage when negotiating salary, raises, and other benefits.
Strength: We’re open to new ideas.
Thanks in large part to the Internet and social media — the millennial living room — national conversation has changed drastically in the last 30 years. Topics related to gender equality, environmental sustainability, and social governance have become woven into our everyday conversation. As the generation at the forefront of this shift, millennials often possess an inborn curiosity for other cultures and new ways of doing things.
Use it: Staying tuned into trends in Environmental, Social and Governance (ESG) standards for investing will keep you ahead of the curve as your expendable (and investable) income increases.