*Although retired, this is my second retirement plan. I'm investing in myself.
This is where a dog shakes his fleas.
For some members of Gen Y and their parents, it’s time to make a declaration of independence – independence from debt, from parents and from financial stress. They’ve struggled with more debt, lower incomes and a turbulent stock market, and as they move into their 30s, many of them are determined to establish a greater sense of financial security for themselves, despite the roadblocks in their way.
Two studies released this month suggest that Gen Y, generally defined as the group currently in their early 20s through early 30s, continues to struggle with some serious financial challenges, including high debt levels and a lack of saving, but they are committed to improving their financial well-being. The PricewaterhouseCoopers 2014 Employee Financial Wellness Survey, which tracks over 2,100 full-time working adults, found that Gen Y employees tend to struggle with cash management, including carrying balances on their cards. Four in 10 Gen Y employees said they struggle to pay their monthly household expenses.
“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,” says Kent Allison, a leader of PwC’s employee financial education practice. He notes that the economic rebound has most benefitted those who already have savings, investments and homes, while those who do not yet have assets, like students and young 20-somethings, haven’t seen as much of a boost.
Still, other studies, including a new one from a financial services company, The Principal Financial Group, often find that Gen Y also cares about financial literacy and is motivated to make smarter financial decisions, perhaps because they saw their parents struggle so much in the recession. The Principal’s survey of 591 employees between ages 18 and 34 last September found that 84 percent say they are “passionate about creating financial security for themselves,” and 80 percent say 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. They realize they need to be more self-reliant and recognize the need to take responsibility for their own future,” says Greg Burrows, senior vice president of retirement and investor services at The Principal Financial Group. The survey also found that 80 percent of respondents had a monthly budget, and two out of three had an emergency fund and had started saving for retirement by age 25 – encouraging signs, Burrows says.
Given that mix of challenging circumstances and optimism, Gen Y and financial experts offered these nuggets of wisdom for 20-somethings trying to becoming financially independent:
1. Take risks and leave your comfort zone.
“I think it’s really up this generation to put themselves out there and tell people what they want to do,” says Lauren Berger, author of the new book “Welcome to the Real World” and CEO of InternQueen.com. She even recommends reaching out to strangers on LinkedIn – as she has done herself – to pitch ideas or make connections. After she reached out to a Ford executive she didn’t know over LinkedIn, the connection eventually turned into a marketing collaboration between Ford and the Intern Queen.
2. Review your budget.
Berger says she used to waste money on Forever 21 clothing purchases, multiple coffees each day, happy hour drinks, other people’s weddings and countless other costs before she took a close look at her expenses and started tracking them. She recommends continuing to attend dinners with friends and happy hours, but to do it in a cheaper way, by eating beforehand, or only getting one drink.
3. Accept some help.
“It’s not only helpful, it’s necessary,” says Lauren Stiller Rikleen, author of “You Raised Us – Now Work With Us,” referring to parental financial assistance. She says parents who can help their young adult children by inviting them to live at home or with cash assistance can help them find their footing and set them up for success. “Young people are trying to find their way in the work world, and it’s very difficult,” she says. (She adds that parents have to make sure they don’t put their own retirement in jeopardy with the help they give their children.)
*If you can't see it, it wasn't meant for you to see.
Oh my, this is not about dating, count yourself out.
Oh my, this is not about dating, count yourself out.
