Millennial Mindset: Part 2 – Woe is Debt

13332862_10101716168376870_1910866764927987259_n.jpgWhat do nearly all millennial’s have in common? Debt. In 2015, CNN Money reported, “Four in 10 millennial’s say they are “overwhelmed” by their debt — nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennial’s between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old.”

I can attest to that feeling being overwhelmed and being in debt. And yet, no one wants to talk about it! It’s so shameful to carry debt, especially credit card debt. We live in this world where

Oh, wait. We knew that bit. But how many of us take it for face value and think about the next 10 years? Unless you know you want to be a doctor, scientist, professor or lawyer… chances are you went to school, found something interesting to study, and graduated. At least, that’s how it used to be.

“Right when it was the Millennial’s turn to grab hold of the American Dream, it exploded in our face.” – Paul Angone, AllGroanUp.com

I graduated from Western Washington University in 2009, young and hopeful of the great future ahead at the end (officially) of the US recession and the beginning of the Global Recession, fun times. I was told, get any a college degree and you’ll be ahead of the game! Ah, hindsight… you wretched beast. As it turns out, college degrees can make a difference. Big surprise. I did not get a degree in Petroleum Engineering, Pharmacy, or the other 8 highest paying college majors. Instead, I designed my own degree and studied sociology, communication, and creative arts. I graduated with above average grades and walked out into the world a sparkling new human being ready for whatever the world threw at me with above average student loan debt.

Hello #adulting.

The thing is, how many of us have conversations before we leave for college with the adults in our lives about money? Did you learn to write a check? File your taxes? Balance a check book? Understand credit vs. debit? Understand subsidized vs. unsubsidized loans? A loan vs. a grant? I hope that many of you can say that you did. But far too many of us are not financially literate, and the next generation isn’t doing much better.

A new study finds that even after the financial crisis, 63 percent of Americans are not financially literate and do not have a good grasp of how to manage their funds. And, according to Student Loan Hero, “Americans owe nearly $1.3 trillion in student loan debt, spread out among about 43 million borrowers. In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from last year.” Good times yeah? I think not.

This is a real issue that more than 10% of the US population and half of the 80 million within the millennial generation is dealing with! Despite the headway that has been made, the struggle is very much alive and real. Yeah, I recognize that every generation has their struggle and that hard work and commitment to one’s own success is key. But let’s not discount all of the statistics, research (one of the most studied generations to date) and oodles of testimony straight from their mouths (ahem, part 1) that support that this generation has been especially hard hit with roadblocks.

Stepping off my soap box… let’s talk about some ways to manage your money, lower your debt and build for your future. Sound good? Good!

No matter how much money you have (or don’t have) your money mindset is key

If I asked you to list all of you assets, what would you list? Probably house / car first, right? What about your relationships? Health? Career? Work ethic? Travel experience? In order to get to a better financial health overall, we need to start looking at our life and our money holistically. They are not mutually exclusive. Money does not create happiness, we know that, but it sure can add to it (check out this fascinating blog that includes rich people answering the question, “what does it feel like to be financially rich?”… very interesting). But just having money isn’t going to solve your problems or make your happy. The people in your life and the impact you get to make, your legacy (however you define that), is important to your overall happiness. If money doesn’t create happiness, but we still need it to exist in our capitalist economy, what then?

First, we have to learn how to budget, save and invest. Those three things are your (and all of our) keys to living a more financially free life.

You have to know how much money you actually have in order to manage it wisely. Ignoring the potentially penny-pinching truth will not make things improve. Plan a date night with yourself (or your partner if you have one), grab some wine, put on relaxing music or whatever you can to make it a pleasant environment. This is you taking charge of your life. This is a good thing!

Some action steps:

  • Make a Budget!! Print out your bank statements. Categorize your expenses and start looking at the real picture on how you are spending your money. What is your money in vs. money out? What are your fixed expenses? What are your nice-to-haves? Get clear about what you have to spend money on and what you have left over.
  • Pay yourself first. If there is one thing I have learned over the years it’s that if you aren’t paying yourself first, the money is as good as gone. Contribute to your retirement. Plan for short / long term. Set up an automatic withdrawal from your paycheck, even better if you can set up via your payroll. Second best? Auto-transfer to a savings account not attached to your checking account! This is for savings, not for spending. Need it to be even more seamless? Try out an app like the one I use, Digit that automates savings based on what you can afford. Save your change, save $1s or $5s, whatever that means to you… just be saving and have a goal in mind and the last thing, most important in my mind, build up emergency savings for unexpected events.
  • Multiple streams of income can be one of the best ways to eliminate your debt and maximize your savings. Whether that is a second job, writing and selling an e-book, get creating and open an Etsy store, find freelance or virtual assistant work, or investing in stocks… having more than one funnel of income is going to skyrocket your financial stability and before you know it you’ll be the one giving out advice to your friends!

Listen, money is challenging and we all can use money advice. Whether that comes from a trusted friend, mentor or financial professional, you need to have the difficult conversations. And remember, you are not alone.

Some of my favorite Financial Literacy resources:

  1. I’ve been a longtime fan and user of the budget tracker and educational platform: LearnVest.com. You can find information on their site about everything you never knew you needed to know and can use their budget tracking tool to manage your money!
  2. Whether you want to learn more about investments, get started on your child’s college savings, take a financial literacy quiz, or if you’re seeking educational information and interactive games for children, MyMoney.gov has something for everyone, easy to navigate and a wealth of knowledge (see what I did there! Ha!).
  3. One of my Sheroes is Brittney Castro of Financially Wise Women. I love that her business is focused on uplifting and empowering women to take charge of their money and their lives. Definitely worth checking out her blog for some money inspiration!

You deserve to have financial security, no matter what your money story might be or where you came from. You are worthy, you do not need to be ashamed of your financial situation. Rather, empower yourself to change your circumstances. Arm yourself with knowledge and take action. Small and steady steps will make an impact.

Cheers to you and your financial success!

Like what you read? Comment below and please share! Be on the lookout for Millennial Mindset: Part 3 for more insight and truth sharing, straight from a Millennial mouth (or rather, keyboard…

 

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