If we could write our 20 year-old selves a letter it would say, “Start now. Start saving for retirement. Even just a little.” We know it doesn’t sound fun or maybe even necessary to start saving for something so far off, but if you do, you will thank yourself some day. And that “some day” will come sooner than you think. Set a few money milestones for your 20’s and 30’s and rest easy knowing you will be able to go to dinner on Mars if you want to in your 70’s. It could happen! Your generation is just that innovative.
Millennials are the most educated generation ever. You have so much information at your fingertips and so many tools to make your life easier. But all of that “noise” also makes it easy to get distracted. We have seen the amount of options make it tempting for people in their 20’s and 30’s to lack focus, jump jobs, and not commit. Those behaviors will have long-term consequences.
So dial up the focus another notch and hit these money milestones for your 20’s and 30’s now.
1. Put time to work for you.
Sure, it seems like a long time until you retire – but that’s the point.
Right now you still have time on your side. Compounding interest is your best friend over time. Here’s a refresher on interest.
Act now or you’ll regret it later. Sounds harsh, but there is no way to turn back the clock on your life or your money.
Take a little bit of your hard-earned money and set it aside for the future. Use an app to save for your future and take some of the pain out of the process. Using an app like Stash, you can start savings for as little as $5 a month. It will add up. But not if you don’t start.
2. Don’t wait until your student loan debt is gone.
We can safely assume that if you are in your 20s and 30s you have massive student debt. Your education cost you 200% more than that same degree just thirty years ago. That’s not right, but it is your reality. Don’t let that student debt keep you from putting a little bit away for retirement now.
You’re proven you’re smart by investing in education; now stay smart and make sure you are putting a little away for your future too.
Use one of our savings calculators to get an idea of what amount you might want to set as a retirement savings goal.
3. See it to believe it.
Not a big fan of taking your money from today and setting it aside for tomorrow? You might be able to see the value better if you create some Pinterest boards or a vision board for your future.
Create a tangible vision for your future.
Would a photo of a little vacation home on the island help you save now to enjoy that later? Or a photo of a trailer full of band instruments for school kids remind you of your dreams of service in retirement?
The more you can do to help you (and your spouse) see your future as a reality, the more likely you are to save for that future.
4. Pay attention to big expenses.
Lots of things can get a person in their 20s and 30s off track quickly.
One big pitfall is “lifestyle creep” – allowing your rising standard of living to eat up your raise at work. Investopedia defines lifestyle creep as, “A situation where people’s lifestyle or standard of living improves as their discretionary income rises … former luxuries are now considered “necessities”.
Bethany made a mistake in her 20s spending so much on clothes. It’s easy to do. (And that was before Amazon Prime existed.) One day she just looked around at all she had and thought, “What am I doing?” She took the next three years off and didn’t buy a thing.
Another huge expense for millennials is expensive weddings. The average cost of a wedding right now is $35,000. Wow. That is one expensive way to start a partnership. The day you declare your lifelong love to God and everyone gathered is super important, but watch out for spending on things that won’t really matter 2 months after the wedding or definitely in 2 years.
5. Pay attention to each other.
Another great thing to pay attention to is your spouse’s (or boyfriend/girlfriend’s) view of money. More than likely you don’t approach spending and saving the same as your mate. We’ve found about 70% of people marry their money opposite. This difference of opinion sets couples up for fighting about money. In fact, “money” is the #1 reason cited for cause of divorce in America right now.
So invest in your relationship by learning your Money Personality and theirs. Learn to respect your differences and use each other’s strengths in money management. You will save a lot of time, money, and heartache figuring that out in your 20s and 30s.
Don’t feel like these milestones for your 20s and 30s are just another “old person” nagging at you. We are excited for you. Your generation is so innovative and creative we just know you will all do great things.
So find ways now to invest in not working forever. Keep being awesome. Making this country great. We believe in you.
Millennials, do you have additional suggestions for your peers? Or, people who remember dialing a rotary phone, do you have some wisdom and encouragement to share with this generation? Leave a comment below. We’d love to see a positive dialog begin.
Make it happen!