Statistics concerning the financial health of the 18-37 crowd can be misunderstood.
They’re often seen as weighed down by debt, with little savings, and a much too conservative approach to investments. However, according to a recent Modern Wealth Index survey by Schwab:
• Nearly one-third (31 percent) of Millennials said they have determined their financial goals and have a written plan. By contrast, just 20 percent of Gen Xers (ages 38-53) and 22 percent of Baby Boomers (54-72) said the same.
• Millennials are also more likely than their older counterparts to have specific savings goals, work with an investment advisor, and, among those who invest, regularly rebalance their portfolio.
Yet, all is not well. They do have a ton of debt!
According to a separate study by NBC News/GenForward, about 75 percent of Millennials have debt — mostly credit card balances and student loans, with 25 percent carrying over $30,000 of debt and 11 percent trying to pay back over $100,000.
So heavy is their debt burden that more than half of all Millennials say it has made them put off buying a house, saving for retirement, or getting married.
Many Millennials acknowledge that short-term—even indulgent—spending is more important to them than setting money aside for the future. Asked about obstacles they face when trying to save money for future goals, they were more likely than their older counterparts to cite lifestyle items like dinners out and vacations.
The Millennial priority of spending on experiences actually demonstrates some financial wisdom. Research has shown that buying experiences tends to be more meaningful and satisfying than buying things.
Just don’t spend all of your money that way. The experience of not having enough to live on in your later years won’t be very satisfying at all.
Do you want to have it all? Do you want to live debt free? Do you want a tax-free retirement? The Money Architects can help you design and implement a plan to do just that!
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