By Apathetic Millennials
As ‘millennials’ (the word alone sounds futuristic and unsure), we have more access to information and resources than ever before. Still, for our generation, the words “fiscal responsibility” can evoke feelings of terror and dread (among the others: “unpaid internship,” “the future,” “the future President Donald Trump”). Older generations may not get it. We’ve been called entitled. We’ve been called narcissistic, lazy, delusional, and we’ve been generalized in headlines that begin with the words “Why Are So Many Millennials…”
While the baby boomers and Generation Xers may have us convinced that our financial woes can be solved by vaguely picking ourselves up by the bootstraps, the data backs the fact that we currently face a unique set of financial conundrums:
- Record High Student Loan Debt: Want to see something frightening? Our financial Willy Wonka tunnel ride begins with some disturbing data. This website calculates the current student loan debt ($1.4 trillion, as of this writing) in the United States as it soars past the national credit card and auto loan debt at anxiety-inducing rates. Attempts to tackle these loans and their high interest rates are often obstructed by…
- Rock-Bottom Wages: A study conducted this year found that NYC millennials make roughly 20 percent less than the previous generation. Between 2000 and 2014, the percentage of young NYC workers in low wage jobs (e.g. hospitality, retail, food service, etc.) rose 4 percent while the rates of those in mid- to high-wage industries dropped 3 percent. On a national scale, the yearly income of 18 to 34-year-olds is currently $4,000 less than that of those in the same age group in 2000. As we wade through the murky waters of unpaid internships and insurmountable expectations of “5+ years of experience required,” we must also confront…
- Rigid Societal Pressures in a Changing World: The tendency to look to the past for advice about the future is no longer a viable strategy. Oftentimes parents and other members of older generations will remind us that they married and had kids at our age. They moved out earlier. Bought houses. Bought diamonds (an article by The Economist drew ire from millennial crowds when it asked the absurd question: Why Aren’t Millennials Buying Diamonds?). With the pressures of the past haunting us, we may feel that we are lagging behind. Stats from Goldman Sachs indicate a current median marriage age of 30 years old (compared to 23 years old in the 1970s). They indicate that nearly 30% of individuals aged 18 to 34 are still living at home as of 2010. They indicate a generation’s revised priorities in the face of debt and economic insecurity.
So college wasn’t necessarily the express lane to the prosperous future our parents and guidance counselors promised us. It’s okay. Breathe. While it may be tempting to hold out for major economic upheaval, our day-to-day lives are not built upon broad macroscopic solutions. Rather, it’s the simple tangible actions we take that can ensure a better financial future for ourselves. The question isn’t what we should do (“save more money” – we get it), but how we should do it. Here are some real tips for real people:
- Create a Budget: Despite our unique set of financial woes, we’ve got at least one unique advantage: our resources are pretty damn automated. Creating a budget is no longer the pen-and-paper operation it used to be, nor does it necessitate countless tabs of spreadsheets. Apps like Mint and You Need a Budget (YNAB) do the work for you, so you can keep track of where your finances are going and trim the fat from your budget.
- Get a Savings Account: You know that vague ‘let your money make money’ expression? That’s a real thing (kind of). By putting away some money in a high-yield savings account (if you need help, start here) with an annual percentage yield (APY) of 1% or more, your money can make a little bit more money. The catch here is that in order for it to really work in your favor, you should limit withdrawing funds for emergencies. Don’t let the idea of a savings account scare you — start small, and gradually increase as you feel ready. If you need some help, an app like Digit can be a good place to start.
- Take Advantage of Discounts: Still have that college ID? Make sure you’re aware of all the places where you can get discounts and freebies. Check out this list of over 100 places that offer student discounts. Remember, they don’t all advertise so knowledge is power (and money) in this case.
- Get a Low-Interest Credit Card: Okay, remember that list of scary words? Credit is definitely one of them. And while credit cards can definitely be a recipe for disaster if not properly used, learning to use credit responsibly is a valuable tool that can teach you important lessons in fiscal responsibility, budgeting and staying on top of a schedule — not to mention, it’ll help build your credit score which will definitely become necessary when you’re looking to buy a house or a car down the road. Need help finding the right card? It’s not always easy to find the most accurate information, but you can check out resources like this one available so you can pick the one that best applies to your situation.
- Let the Little Things Add Up: Before you go to Pret a Manger for lunch again, think about what that $15 a day adds up to (hint: it’s something like $4,000 a year). Start packing lunch a couple of days a week, cut back on happy hours, and order water the next time you eat out. You don’t have to take the fun out of your life entirely, it’s more a matter of opting out some of the time and letting that saved money work for you.
- Wait a Week Before Making an Impulse Purchase: We all know the feeling of deciding we need something that we didn’t even know existed the day before. The next time that insatiable wave rushes over you, tell yourself you’ll give it exactly one week. Set a reminder in your phone, and if a week from then you still feel like this item will improve your life, then go for it. Chances are, though, the feeling was fleeting and that item will be in the back of your closet by this time next year.
- Don’t ‘Do It for the Gram.’: So often we feel like we need to be keeping up with our friends. Living glamorous lives full of glamorous picture-perfect food and yachts (since when does everyone have a boat?!) can sound, well, glamorous — but if it’s not within your means, try to think past the immediate pressure to keep up appearances. Realistically, no one will notice if you take a break from posting, or if you redirect your foodie instagram pictures to awesome looking meals you made yourself. You can do it, Glen Coco, we’re all rooting for you.
Finally, the secret to our generation’s personal finance issues is that there is no secret. There’s just us. The way to be smart about your money isn’t through get-rich-quick schemes – it’s through consistency in the little things you do. While there is space to address our nation’s economic issues as a collective whole, the fact is that personal finance is, well…personal. We as individuals have to hold ourselves accountable for our money, and luckily, we have the right resources to do it. To take a page out of Smokey the Bear’s book: only you can prevent financial fires.