Money and Millennials
It helps to work together
“What will we do??? We HAVE to pay this bill! How did you let the account get so low? Ugghhh … why did you have to buy that last week? I hate asking my dad to loan me money!”
Conversations like this happen all the time. It could apply to many age groups, but a recent CNBC article highlights this: 62% of Millennials (ages 23-38) say they live paycheck to paycheck.
Millennials tend to be saddled with more debt than previous generations. If you combine the reality of debt with gaps in financial literacy, then add dashes of instant gratification and overspending, it leads to the least financially secure age group today.
“Emotions around money lead us to make irrational choices,” said personal finance author Farnoosh Torabi. “When your financial life is in disarray, chances are, you will overspend,” she told CNBC Make It.
What can alter this trajectory? One step is to slow down and take an honest look at your finances. You can only spend money once, so it pays to choose wisely.
Many encourage a “debt snowball” approach, getting rid of smaller debts, and then rolling your payments into progressively larger ones. Others do well by paying off high-interest debt first to keep interest from compounding against them.
Keeping track of money’s coming and going also helps. This reveals a picture of the present while helping create a better future.
Each situation is different, of course. That’s why it often pays dividends to invite others into your financial decisions. This could be trusted friends, a mentor, a pastor, or a financial advisor.
There is much more to life than financial security, of course. Financial insecurity, however, is not fun for anyone.
Besides – your dad is probably tired of lending you money.
Steve Lane is an Everence® Financial Consultant in our Sarasota, Florida, office.