By Brittany Newland
Sometimes it seems like millennials just can’t seem to catch a break. Most of us have already faced two major global crises throughout our working lives—the 2008 Stock Market Crash and now the 2020 Coronavirus Pandemic. Although the last few years were largely good ones for the American economy, it wasn’t enough time to set millennials up with a real solid financial foundation. For most, stockpiled with credit card and student debt, and very underrepresented in the housing and stock markets, millennials have entered this uncertain period with significant problems and few resources. The youngest American adults are facing the first serious economic crisis of their working lives, and most of us are very unprepared.
Millennials, still recovering from the Great Recession, now face a downturn that’s being compared to the Great Depression. We were in bad shape before the pandemic due to student debt. While the coronavirus downturn presents challenges for every age group, millennials have had to face a unique set of tough circumstances. But we’ve also developed resilience and a common-sense approach to life that echoes the generation raised during the Great Depression, and a motivation to create change, much like those who shaped the 1960s.
So what’s the future look like? What can we do? Millennials actually feel a greater sense of optimism about the environment, a strong commitment to financial responsibility and saving, and an even greater craving to drive positive change in our communities and reward businesses that do the same. The pandemic could have crushed our spirits. Instead, we’ve taken it in stride and embraced the opportunity to come out better on the other side.
Managing money will have a whole new look for millennials. The ability to budget and save will be invaluable for the millennial group that possesses far less wealth than previous generations had at the same age—and is facing yet another recession, this time as workers enter what should be their peak earning years. The viewpoints of our resilient generation will be critical to creating a new and better normal. We see the brighter society that’s possible once the pandemic passes, and we want businesses to help us achieve it. It’s an opportunity business leaders cannot let pass.
This is the time millennials are truly looking to see where we stand financially, taking a step back to see what’s next and what our future plans will be now. This is the perfect time to really start thinking about how much we are spending on what. How much do we spend each month? How much is fixed? Are these expenses necessary? What can we cut back on?
Being able to reach financial freedom requires self-reflection and a ton of self-discipline. Break down expenses, have an approach to save money on a regular, consistent basis and automatically so it’s not even seen or thought about. The rule of thumb is that 20% of your income should go towards saving. This financial focus has completely shifted for most millennials, who are cutting back on spending any additional money on non-essentials. Living below our means is crucial in the current economy. It may seem hard now but, as history has shown, time will allow for better things and the economy won’t be doomed forever.
Now that we’re on our way to financial freedom, we need to know what we want to spend our money on. Write down your goals for the future. It may seem simple, but it works. Studies have shown that a person is 42% more likely to achieve their goals if they write them down. It creates a forced clarity on what you want to accomplish and motivates you to complete the steps necessary to complete the tasks necessary to succeed. If you’re anything like me, you love checking things off the metaphorical, or in this case, literal list. Make your goals realistic, using costs and timelines. Do you want to own your own vehicle and/or buy a home? When and where, and what is the expected price?
It’s never too soon to take steps to improve your financial health. Millennials aren’t doomed—they’re just finally waking up to financial reflection, self-discipline and seeing a complete change in the way they spend money. It’s not only millennials, but everyone in the world right now. Every major change comes from unexpected events. If there’s no reason to watch spending, it won’t happen. Financial reflection, living below your means and saving money is possible. The economy will come back. Everyone will be better for it and smarter from it in the end. This too shall pass.