The term “millennial” is getting thrown around a lot these days. What does it mean? Who’s considered to be part of the “millennial” crowd? Being the stereotypical young adult that I am, I turned to Google for answers. Depending on the source, members of the Millennial Generation, or Generation Y, are people born anywhere from the early 1980s to the early 2000s. As a person born smack dab in the middle of that range, I’ll let you in on a little millennial secret: we are utterly clueless about finances. Sure, I did a budget project in 8th grade, but the only thing I learned was if I ever wanted to move out of my parents’ house, I would need a job that pays more than minimum wage. Lucky for me, I have a job in the financial industry, giving me an edge on my peers as far as being financially savvy goes. We need help understanding how the financial decisions we make today will greatly impact our financial future.
Start Early and Have a Strategy
In a recent conversation with my 26-year-old brother about investments and saving, I realized that most of our generation has no game plan. We know we’re supposed to be saving, we’ve heard of investing, and some of us probably even have retirement plans with our employers. But what’s our strategy? Why are we saving? How do we invest? What is the difference between saving and investing? No one taught us the real-life application of these things! Also turning to Google to find answers, my brother came across an article from daveramsey.com on how teens can become millionaires. There was a chart showing how, over a span of almost 50 years, one young man turned $16,000 into almost $2.3 million, while his buddy turned $78,000 into just $1.5 million. Aside from the extremely flawed logic that you can find something that will consistently earn 12% every year, and a 19-year-old has $2,000 of extra money to invest, it proves a point: the earlier you get invested, the longer you have for the money to grow.
It’s terrifying for me to think that I won’t even be able to touch the money in my IRAs without penalty until I’m 59½ – more than 35 years from now! That’s longer than I’ve been alive; how can I think that far into the future if I can’t remember that far in the past? We need role models to help prepare us to lead our best lives and leave powerful legacies. An important part of that process is sharing your financial knowledge with us. The learning curve in the financial world can be brutal, but it can be braced with a little insight from someone who’s been there before. On behalf of my generation, please help us!