Millennials are the nation's largest living adult generation. As of July 1, 2019, there were 72.1 million millennials, surpassing baby boomers for the first time. This generation, who are currently between the ages of 25 and 40, has lived through more "unprecedented times" and financial hurdles than seems fair. They have struggled through multiple financial crises, student loan debt, rising costs of living, stagnant wages, and now, the coronavirus recession. If there is a generation that knows about financial anxiety, it's millennials.
Millennials make up the largest portion of the workforce. Yet, despite this, they controlled just 4.6 percent of U.S. Wealth in the first half of 2020. So how does a generation that hasn't held significant wealth plan for the future?
Luckily, Trust & Will knows a thing or two about securing your financial future without sacrificing today. Financial planning is more than being told to skip a drive-thru morning coffee. For millennials who aren't sure where to start, we've got you covered.
Set Clear Financial Goals
Millennials have lived through one financial disaster after another. The early 2000s recession impacted the United States just as the first millennials were entering adulthood. The financial crisis of 2007-2008 hit as another wave of millennials enrolled in college and entered the workforce. Today, older millennials are approaching 40, tasked with planning for a future in an uncertain economy.
The first step in successful financial planning is to set clear goals. If you're one of the nearly 45 percent of millennials who have student loan debt, you may want to have a portion of it paid off before a major milestone. You might not have a retirement fund yet and are starting to have anxiety about the future. How much do you want to have saved, and by when? What steps can you take to get there?
These are huge goals. But you're most likely to be successful when you have a clear vision of the future and a step-by-step plan to help you get there.
Take Stock of Your Resources
Millennials typically have a difficult time talking about money, even with each other. It can be an anxiety-provoking topic. Because they have consistently earned less than previous generations at their age, many millennials feel pressure to live up to an idea of where they think they should be at this point in their lives.
To make serious decisions about your financial future, you must first have an accurate picture of your financial present. Assess your financial situation by writing down what you have coming in and what's going out.
Money coming in:
What is your income?
Do you have anything in savings?
Do you have investments that pay out dividends?
Money going out:
How much are your monthly bills?
Do you carry debt; if yes, how much?
How much do you pay for health and life insurance?
Planning your financial future:
Are you living within your means?
Where can you cut back on spending?
Do you have a Will or Living Trust?
Keep Track of Your Progress
Keeping track of your progress will help you attain the financial goals that seemed so daunting in the beginning.
Millennials consistently struggle to conserve money. While student loan debt is a significant burden, most millennials cite rising housing costs as the chief reason they can't save. Housing costs combined with stagnant wages can make the idea of getting ahead seem impossible.
Millennials have had to get creative with cost-saving solutions. Many have ditched big city living for the more affordable suburbs, while others have combined their households to split the bills. A small but not insignificant number of millennials have also opted for a more nomadic lifestyle, living in modified vans or buses to save on housing costs while traveling the country. Your plans for the future can only pan out as well as you prepare for them, no matter where or how you live.
Millennials are more likely to break a strict budget out of necessity. For that reason, it's important to keep track of the progress you make and change things up when something isn't working. Once a month, take a look through your budget and the steps you took to move closer towards your goals. Take note of where you were successful and where you can change your strategy for a better outcome.
Talk Openly About Money—It Pays Off
While millennials may have a hard time opening up about their finances, it can have far-reaching consequences when they do. Having open, direct conversations about money can build trust, strengthen relationships, and even ward off divorce.
Millennials shoulder the blame every time an industry is on the brink of collapse. But the declining divorce rate may be the millennial's most interesting casualty yet. Many children of divorce themselves, millennials tend to wait longer to tie the knot than previous generations. Traditionally, a couple met, dated, got engaged, and then got married and began their lives together. Millennials, on the other hand, tend to cohabitate for years before walking down the aisle.
In choosing to put off their nuptials, millennials are going into marriage with more financial independence than previous generations. Many have established careers and working towards their own financial goals. As a result, more couples are signing prenuptial agreements to protect their assets before committing to marriage.
Plan For the Future with Trust & Will
The best time to start planning for your future is now. While millennials have lived through a seemingly never ending barrage of cataclysmic events, the last year saw many millennials creating an Estate Plan for the first time. 2020 had that kind of effect on people.
Many millennials have always had to live in the now to provide for themselves and their families. Your financial goals should include protecting what you've worked hard for.
Trust & Will is the leading online Estate Planning platform that makes it easy to create a Will or comprehensive Trust-Based Estate Plan. Plan for the future knowing that your children and pets will be taken care of and your health care decisions and final arrangements will be respected and carried out as you wish.
No one knows what the future will look like, but with Trust & Will, you can make sure that you are as prepared as you can be.
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