The Recession Has Caused Millennials to Make Retirement Saving Mistakes

Written by adminJuly 30, 2018
Life Style

When you grow up during a time of turmoil, it can distort your thinking to the point of learning not to trust a certain institution…or you might get bit!

Can we really blame millennials for not trusting the stock market after the big collapse? During the past decade, millennials either struggled through it themselves or watched their parents fight to keep their homes and jobs during the worse economic disaster since the Great Depression.

The thing is, millennials say they’re confident in investing in the various vehicles, like stocks and bonds. 66% of them say they know what to do, but they seem keener on stuffing that money in a jar in the backyard rather than investing it. In fact, 2/3rds of young adults have decided it’s best to keep their money out of the market and in their own hands.

According to Ryan Bailey, the head of Bank of the West, they’re putting their money at risk by doing this.

“Millennials have been stuffing their savings under the mattress instead of putting their income to work through strategic investments. While this may seem safe, they are putting their goals at risk by keeping cash on hand. While they are young, millennials have time on their side and could be missing an opportunity to grow their savings over a lifetime.”

That might be exactly the thing on their minds. They’re still young and have plenty of time to plan for retirement. We’ve written previously about millennials not so focused on retirement just yet. They’re more invested on digging out of extreme student debt or saving to buy a house.

According to a survey, 65% of millennials say the Great Recession has given them pause to invest in the stock market. This is despite an extremely bullish few years that saw stocks rise to their highest levels in its history. It seemed as if a new record was set every other day, making those who dared to invest quite wealthy.

Still, millennials aren’t too concerned with their future. And it’s just not their age group. 21% of all Americans have no retirement plan or savings at all. Either they can’t afford to save or they aren’t too concerned. That seems to be a major habit of a lot of Americans as the economy gets better…live for today and they’ll worry about tomorrow when it comes.

Due to this fear, the Trump administration wants to make it easier for all Americans to prepare for retirement, either by saving or helping to incentivize employers to provide plans to their employees, with the second round of tax cuts.

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Millennials Aren’t Being Practical About Their Finances

Written by adminJuly 26, 2018
Life Style

Millennials get a lot of slack for being a generation who grew up in mostly wealthy households without much struggle. Many still live at home with their parents, well into their 20s and 30s.

Yet, despite a major debt crisis, crushing student loan debt impacting them directly, and an economy that’s still recovering from the Great Recession, Millennials remain a financially optimistic group of people.

TD Ameritrade conducted a survey that found 53% of millennials believe they’ll become millionaires in their lifetime. A majority of them believe they’ll retire early, before the age of 56.

Despite this burst of optimism in their ability to gain wealth, very few millennials actually know how to make that dream a reality. They haven’t developed a knowledge in how to properly invest and save their money.

The cruel reality is, the age of retirement is getting pushed back longer and longer, with many experts predicting that a lot of retirees will be forced to work until they die. Social security is dwindling to nothing and younger generations are taking on so much debt, it’s nearly impossible to save during crucial years when they need to start.

Millennials simply don’t have the financial literary yet to make a realistic retirement goal. Mass Mutual wanted to find out how many people from this generation actually knew about financial matters, and only 17% of 500 millennials got a perfect score.

As they age, they will be faced with the harsh reality that they simply weren’t prepared for life on their own.

This article isn’t meant to be a judgement of millennials, but a wake-up call. Life won’t turn out how they expected and they must be confronted with that reality as soon as possible if they hope to make it. The future looks grim, so they must be prepared for the fight ahead, as they will endure harsher obstacles than past generations did.

In fact, millennials will have to start saving money in their early 20s, which seems incredibly difficult if they’re living at home due to the high cost of rent and tremendous student debt weighing them down.

The best thing they can do for themselves is become educated on their options.  If you’re paying back a lot of student debt, it is extremely difficult to save money. There are government programs that can help you pay off those debts MUCH sooner. Financial Helpers can help you navigate those tricky waters before the programs are shut down for good.

Give us a call to learn your options at:

Call Now 1-844-332-2079 

Another thing is to look at ways to curb spending so you can pay off your debts sooner than anticipated. That’s why a lot of millennials still live at home. They simply can’t afford their own place and all the bills that go along with it.

But rather than piling debt on top of debt, millennials can use public transportation, not eat out as much, learn better budgeting skills, get a side gig, make coffee at home rather than the expensive coffee stores, and don’t get a credit card unless it’s low interest.

These steps will help, but it’s up to the person to take the time to gain better financial literacy and have a more realistic picture of their future finances.

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Why Are Millennials Still Struggling to Buy a Home?

Written by adminJuly 11, 2018
Student Loan Consolidation

Here we are, a decade after the worst housing disaster in American history hit the economy. The economy is booming, there are a record number of jobs available, and unemployment claims are lower than they’ve been in 70 years.

Despite this, millennials are still struggling to make due. Riddled with student loan debt and making too little to take care of their bills, more kids are living at home longer than ever before.

According to a study from Zillow, nearly one-forth (or 23%) of millennials are still living with their parents. You might think this is a holdover from the Great Recession, but this number is actually higher than at any other point in the last decade.

Aaron Terrazas, an economist at Zillow, thinks the problem has more to do with the high cost of rent than anything else.

“As rents outpaced incomes over the past decade, young people turned to their families in large numbers to ease the housing cost crunch. But even as the labor market has improved, the family safety net has yet to unwind. Living with parents may allow young adults to pursue work or a passion that may not be especially lucrative, or save enough money for first and last month’s rent or a down payment on a home of their own.”

He makes a good point. The cost of rent has skyrocketed past the increase in wages, making it unaffordable to begin with. Add in the fact that millennials have the highest level of student debt than any other generation (62% of millennials have student debt), that makes it virtually impossible to start life on the right foot.

Danielle Hale, an economist for Realtor.com, agrees.

“Existing debt and lower down payments leave younger shoppers more exposed than others to the impact of rising mortgage rates and record-high home prices,” she said.

By comparison, only 9% of Gen Xers have student debt.

If you have large amounts of student debt, the odds of finding a home and moving on with your life aren’t in your favor. If you’re in this situation and unsure about how to take care of your student debt, give Financial Helpers a call! We’d love to hear from you to discuss your options.

Call Now 1-844-332-2079

There are government programs and strategies designed to help get you out of student debt faster and cheaper than just paying the bill. The government knows this is a major crisis, but no one knows how long the Trump Administration will keep certain programs in place.

He’s already attempted to target the help implemented by President Obama in a bid to cut government spending, but agreed to keep them for another year to get the most recent budget passed through.

According to the survey, 35% of millennials hope to make their first purchase within the next year, but 98% of those who are looking find themselves running into one obstacle after another, forcing them to push it off longer than they thought.

The biggest problem is the rising cost. If you have a lot of student debt you’re trying to pay back, and not fully employed, the struggle is going to be having enough for a down payment and finding the right home at a price you can afford.

“For millennials, the dream of homeownership is alive and well, but with prices going up and inventory continuing to shrink, this new generation of buyers are facing more obstacles than any other demographic,” says Trulia economist Cheryl Young. “With tight budgets and fewer choices on the market, most millennials are forced to make trade-offs and are more willing than other generations to give up home and neighborhood features in order to find their ideal home.”

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