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Published On: Sun, Mar 12th, 2017

Why Millennials Really Need to Start Thinking About Money Sooner Rather Than Later

Millennials are always a contentious group to discuss when it comes to saving money

After all, the millennial generation has been labeled as lazy, entitled and shortsighted, especially when it comes to employment and income.

photo/Revisorweb

However, it’s easy to forget that the deck perhaps has been stacked against these twenty-somethings struggling to make ends meet. Many millennials are still feeling the aftershocks of the recession, earning approximately 20% less than their parents during the same stage of life.

Maybe it’s time to rethink the “leech” label for millennials and start thinking about a realistic path for young people toward financial freedom.

After all, millennials will inevitably need to look toward the future. Given the abysmal state of savings accounts in the United States, with many families with less than $1,000 in the bank, what should millennials be focusing on if they want to secure their livelihoods for the long-term?

The Importance of Long-Term Savings

Some analysts note that millennials may need double how much they save for retirement given projections for inflation. While it may not seem particularly prudent for millennials to start thinking twice about estate planning and investing in the future as the present seems so unknown, there’s no denying the “what-if” situations that could haunt those who don’t prepare.

The most important steps for millennials is to do a combination of the following to set themselves up for financial success so they can start building their savings, hopefully toward retirement plans versus being stuck in an endless cycle of living paycheck to paycheck. These steps include:

  • Eliminating credit card debt at all costs: although student loan debt infamously plagues many millennials, racking up additional bills will only exacerbate the problem
  • Rethinking disposal income and “essential” investments (think: going out less and getting more life out of your clunker versus splurging on a new ride)
  • Cutting the cord with needless expenses (think: cable television and bloated cell-phone data plans)

These expenses, both big and small, snowball over time. It may take years to fully escape the dreaded debt trap, but it’s ultimately worth it in the long run.

The Complications of Home-buying and Health Insurance

While home-buying has been considered a cornerstone of the American dream for as long as we can remember, it makes sense that millennials are waiting to buy homes and therefore rent longer than the previous generation.

This likewise explains the phenomenon of students living with their parents will into their twenties, which is quickly becoming the norm. Perhaps society shouldn’t look down on such students and instead embrace their desire to eliminate the cost of paying rent if they can avoid it.

The same mentality applies to healthcare, as the Affordable Care Act currently allows young people to stay on their parents’ plans until the age of 26. At the same time, rising premiums are a problem for those unable to get insurance through their employers.

Despite popular belief, millennials don’t want to be viewed as “leeches,” but rather do what makes sense from a financial standpoint. For many, this means staying with their parents and cutting corners to save money. If such a lifestyle ensures financial freedom, it should perhaps be embraced by young people and society as a whole versus something frowned upon.

Although saving is certainly no easy task for most millennials, it is crucial that young people start looking toward their financial futures sooner rather than later.

 

Author: Carmelo Hannity

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About the Author

- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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