Millennials trying to balance their financesDate posted: 3/19/15 04:15:00 PM
The U.S. economy is on its way up, but its resurgence hasn't benefited students and young 20-somethings the way it's helped some of the nation's older, more established residents.
According to Kent Allison, a leader of employee financial education practice with PricewaterhouseCoopers (PwC), the people who have been rewarded the most by the economic rebound are those who already have investments, savings and homes. Those without assets - primarily students and millennials - haven't received nearly the same kind of improvements.
The PwC 2014 Employee Financial Wellness Survey, which tracks more than 2,100 full-time working adults, revealed that millennial employees tend to struggle with cash management. The study reported 40 percent of millennial employees noted they struggle to pay their monthly household expenses and many continue to carry hefty balances on their credit cards.
"A lot of them are carrying a pretty heavy debt burden, especially out of school, and they're not saving a lot for the future between student loans, credit card debt and trying to meet everyday expenses," Allison told U.S. News & World Report.
He said one way for millennials to start a solid savings foundation is to ask an employer for direct deposit. But instead of getting it all deposited into a checking account, find a comfortable number and have some of it delivered to a savings account. This way, you can still pay off all of your expenses while building a nest egg for the future.
Good news for the millennial generation
There is plenty of talk that millennials - also known as Generation Y - are lazy and unmotivated in the workplace. But when it comes to learning about finances - an understanding they seem to lack - that just isn't the case.
The Principal Financial Group, a financial services company, reported that millennials care about financial literacy and are motivated to avoid unwise final decisions. The Principal's survey of 591 employees between ages 18 and 34 said that 84 percent of millennials reported they are "passionate about creating financial security for themselves." Four of five respondents added that they expect to be "better off financially" than their parents when they are their parents' age.
"Gen Y individuals are pretty passionate and optimistic about the future," said Greg Burrows, senior vice president of retirement and investor services at The Principal Financial Group. "They realize they need to be more self-reliant and recognize the need to take responsibility for their own future."
The survey from Principal also found that 80 percent of respondents had a monthly budget, with two out of three already saving for retirement by age 25 and holding an emergency fund, all of which is an encouraging sign, according to Burrows.
Put less pressure on your finances
Stephanie Halligan from EmpoweredDollar.com is trying to help millennials manage their money. She believes taking peer pressure out of the equation is vital when making any sort of buying decision.
"It's really challenging to exercise self-control when you feel compelled to buy," she said. "Whether you're shopping with your friends at the mall and you feel obligated to buy something or you see an irresistible sale that has you grabbing for your wallet, exercising a little patience could go a long way in helping you save money. Pausing even for a few moments before you buy something can help you curb impulse purchases and save money."
Halligan recognizes it might be satisfying to spend $20 with friends on a few drinks, but she said those expenses can add up quickly.
Also, don't be afraid to accept help.
Lauren Stiller Rikleen, author of "You Raised Us - Now Work With Us," told U.S. News that parents who can help their young adult children by inviting them to live at home or assist them with cash can help set them up for financial stability.
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