If you are in your twenties, you are a young adult millennial. Your colleagues might attend workshops about how to communicate with millennials, and many of the descriptors aren’t viewed positively. But there are good things about being a millennial! For example, millenials tend to be goal-oriented and good multi-taskers. (Jokela, Hendrickson, & Haynes, 2013) Do millennials also share traits about finances?
Young adults have inherited an economic climate that makes a big impact on personal finances. “No generation has suffered more from the Great Recession than the young. Median net worth of people under 35, according to the U.S. Census, fell 37 percent between 2005 and 2010; those over 65 took only a 13 percent hit.” (Girod & Shapiro, 2012) This has caused a surge in young adults delaying marriage and beginning families, with many moving back into their parents’ homes after graduation. But it’s not all bad, and there are steps every millennial can take to fast track their finances – no matter the starting point.
If you are in your twenties, chances are you’re working on training or beginning a career, establishing your own household, and buying big ticket items like cars. You may also have high credit card and student loan debt, not have an emergency savings, lack enough insurance coverage, and lack long and short term goals. (Jokela, Hendrickson, & Haynes, 2013) Each of these are fixable, so if this is you, it’s time to take control of your finances!
- Start by deciding where you want to go. Think about what is important to you, and write two or three specific goals to keep you on track. Include how much money you’ll need and the deadline for saving it.
- Next, create a personal spending plan. This is easier than it sounds! All you need to know is how much money you’re making and how much you are spending. The object is to make your income match your saving and your spending. Don’t forget to include saving for your goals in your plan, and put money aside first for each goal when you get your paycheck.
- Next, tackle your debt. Are you swimming in student loans? If you have federal loans, there are many different options for repaying them. You may even qualify for loan forgiveness or forbearance. Check here for more info: http://www.ibrinfo.org/. Do you have credit card debt? If you don’t pay your balance in full every month, you are throwing money away in interest. Try snowballing your payments and becoming debt free with www.powerpay.org.
- Once you have your goals, your spending plan, and your debt under control, you’re ready to create a Destination Budget. This means making your money give you the life you want by focusing your spending plan on your goals. Do you want to travel? Retire early (or ever)? Buy a house? Have a big wedding? Whatever destination is important to you, make saving for it the priority in your spending plan. Looking for ideas on how to save more money and reach your destinations faster? Check out www.ohiosaves.org and get free tips via emails or text message.
You have the power to fast track your finances, no matter your age. So get to it!
Written by: Betsy DeMatteo, Family & Consumer Science Educator
Reviewed by: Melanie Hart, Family & Consumer Science Educator & County Extension Director in Green County
Sources:
Girod, G. & Shapiro, E. (7/23/2012). Generation Screwed. Newsweek, 160(4/5), p40-41.
Jokela, B.H., Hendrickson, L., & Haynes, R. (February 2013). Teaching Financial Literacy Across the Generations. Journal of Extension, 51(1).
Stein, J. & Sanburn, J. (May 2013). The New Greatest Generation. Time, 181 (19).
