Achieving Financial Success
Achieving financial independence and accomplishing life milestones that traditionally have been associated with adulthood are becoming more and more difficult for young adults to attain. While some may be quick to blame Millennials’ “lazy and entitled” attitudes a look at the bigger economic picture reveals that our ever evolving society may have doomed this generation to failure when it comes to outdated measures of success.
For example, a report from the US Census Bureau looked at four "common milestones of adulthood": Getting married, having kids, getting a job and living on your own. The report found the percentage of Americans achieving all four of those milestones by age 34 dropped from 45% in 1975 to 24% in 2016.
Stop there and Millenials do sound like they might be leading lives that fulfill the stereotypes cast on them. But, also consider this:
- 41% of young families had a student debt in 2013, up from 17% in 1989 and the amount owed on those loans has almost tripled.
- In 1976 24 percent of people aged 25 to 29 had a bachelor’s degree or higher. By 2015 this increased to 36 percent.
- According to PEW Research Center reports, Millennial women are waiting until later in life to have children, but they now account for the majority of births and 60% said that being a parent is extremely important to their overall identity.
- 1 in 3 Millennials live at home with a parent(s). But, Census data from 1960 – 2014 shows that inflation-adjusted rents have risen by 64%, as a result, the share of cost-burdened renters (those spending more than 30% of their income on rent) nationwide more than doubled, from 24% in 1960 to 49% in 2014.
What can we conclude from all of this? Our younger generations are staying in school longer, acquiring more debt in the process and graduating from college to face higher rents than previous generations. The milestones of adulthood are being pushed to later in life while costs and debt rise.
Armed with this knowledge, Millenials who are now parents need to prepare their own children for this new landscape of adulthood. Here is how:
- Go Cashless – In 2016 only 24% of Americans made all of their purchases with cash. Five years ago 36% did. If we are moving toward a cashless society why do we give our kids a cash allowance and cash in their holiday cards? Find an app or bank that has an option for your kids to use digital accounts.
- Instill Budgeting Skills – Millennials know how hard it is to manage high rents, high debt and an entry-level paycheck. 42% have not yet started saving for retirement. Teach kids from an early age how difficult it is to budget for the essentials in life and that doing so requires sacrifices.
- Hire Your Own Kids – Instead of paying for a housekeeper, landscaper, dog walker and other luxury services, hire your own kids. Not only can it save you money each month, you can teach your kids to correlate hard work with success, the value of a dollar, responsibility and you create an opportunity to praise and reward them for their efforts. Instead of a “participation” trophy.
- Overshare – Millennials are often criticized for over-sharing about their lives on social media. Well when it comes to your kids and finances, you almost cannot share enough. Have open and educational conversations with your kids about debt, paychecks, bills, etc. Not to scare them or make them worried about the security of your family, but to educate them about what they will face in life because most schools no longer teach personal finance. If you aren’t talking to your kids about these issues, the odds are no one will be.
Gregg Murset is the co-founder & CEO of BusyKid, Gregg is best known as groundbreaking inventor of My Job Chart which grew to nearly 1 million members in four years. My Job Chart was the first electronic chore/allowance platform to take advantage of our modern digital society. A father of six, Gregg is a certified financial planner and consultant who also became a leading advocate for sound parenting, child accountability and financial literacy. In 2014, he was named Chairman of 2014 “Smart Money Week” for the state of Arizona, as well as, the National Financial Educators Council Financial Education Instructor of the Year. A firm believer in improved financial education in schools, Gregg has conducted hundreds of media interviews around the U.S. in hopes of much needed change. Promoting these changes, Gregg took his family on a pair of RV trips in 2014 and traveled nearly 10,000 miles in just 31 days. When the trips were complete, the family had stopped in 22 different cities in 27 states and performed normal household chores for families in need and organizations requesting volunteers. Gregg is considered a pillar of his Arizona community and is regularly attending his kids sporting events or taking them on weekend camping trips.