Money Conversations for Millennials
Financial stress is one of the leading causes of marital strife, lack of productivity at work, feel of worthlessness and depression. Often times these feelings are out of fear or the vast unknowing of what it truly means to be financially secure, what are the financial averages for your age group and how to right the ship. We all want to pay off debt, save more and be financially independent but we don’t know where to start. Or we think that living a debt free life and investing in your 401k equates to never taking vacations or eat Top Ramen every night for dinner like your old college days.
The real questions are why we think this and why we don’t seek the answers that keep us up at night. The financial advice industry is at your fingertips and yet only about 40% of millennials work with a Financial Advisor. Now the industry has a way to go to earn back respect from Millennials and Gen Xers after the financial collapse and you should only work with someone you trust and have thoroughly vetted who charges fees, flat rates or transparent pricing so in the meantime Triton has some suggestions on other people you should talk to about money. Whether you are looking for advice or just planning — these people make great resources to build your financial future and I can personally verify the good they can do in your financial life!
Spouse/Partner — As said; financial stress is one of the leading causes of divorce in the country and this cannot be fixed by ignoring financial issues in your family. Are one of you savers and the other spenders? Do you have a credit card that your spouse doesn’t know of? Are you hiding spending from your partner? If any of these or any other similar scenarios are yes then you are very very close to a huge fight and potential split. Do you want to have a family with your spouse? Do you already? Then there should be NO financial shame in telling them your situation — and spouses, marriage is a team; if that means sacrificing some goods to pay off a credit card or to catch up on missed student loan payments so be it. The biggest issues need to be addressed ASAP — don’t let it fester and your life changes when you get married, have a child or buy a home so your spending habits must as well. Make a joint agreement for saving AND spending (all the savers out there — it is ok to spend in moderation!) track and reward yourselves for wins and stop worrying every night about your hidden debt or hoping you’re lying about the size of your bonus so your partner doesn’t spend it all. Great relationships that last years are built on solid foundations and being financially secured is a huge cornerstone.
Friends/Coworkers/Siblings/Cousins — Basically anyone who is a peer of yours in life — how do you know that your 401k is way below what it should be if you don’t know what others are saving? This isn’t to spy into the lives of your friends but instead it gives you a HUGE opportunity: What tips, tricks or failures can you learn? For example — maybe you had a rough month with medical bills, car expenses and taxes due; because of this you racked up $2500 in credit card debt. You think this is the worst thing possible — speaking with a friend you tell them about your situation and you learn that it has happened to them! Only worse! They tell you how they paid it off over the course of a year (lost some in interest but paid it off) and then learned that they needed to cut their 401k contributions by $250 to build up a rainy day fund. That fund now has $7,000 in it and they are back to funding their 401k in full in the course of 4 years. Boom!! You didn’t hide or worry alone — you sought advice and someone helped. This also allows you to learn from others mistakes. You might have a family member that regrets buying a home at a young age because they couldn’t afford the house or location they wanted. Being honest, asking for help and actually speaking to people you like and respect can yield results that never knew. On the plus side you gain insight into your friends and family and build stronger relationships. Lastly, make sure you pay it forward when a friend, coworker or family members if they come to you seeking advice.
Parents — Now I will be the first to admit that here at Triton I am spoiled; my parents are the most financially literate people around. They saved, they sacrificed, educated two children and are now enjoying and spoiling their grandchildren while in retirement. So not only growing up were good financial habits instilled in my sister and self but I was introduced to investing as a teenager. So I have seen firsthand the benefits of compound returns and long term investment philosophy. So I understand the 50/50 chance for some of you out there. However much like your discussions with your peers financial life lessons can be learned from those who are great with money and those not so great. A heart to heart with your parents can shine a light on their regrets or successes. Some parents regret not saving early on so they could pay for your college or some might wish they instilled better money management habits. Here is a great time to share your successes along with your questions with your parents. Student loan debt often forces students to take extra classes to finish faster so their borrowing doesn’t increase. Maybe you learned the value of money and education knowing you were fronting the bill. Tell them about the 529 you started right after the birth of your first child so you can help out with college expenses. Your parents are already proud of you; really show them the life you have built for yourself and your family.
Boss — True story — I started in the financial services industry 10 years ago this summer. I was the youngest in my department (compliance) by about 10 years and the majority of my supervisors/bosses/Executives I worked with where 20–30 years older. I was blessed to work with great people who took the time to teach me everything I know about the financial industry today. Anyways — I was living in San Diego, making good money and living the life. That meant putting VERY LITTLE money into my 401k — through random chatting working late one night my boss heard this about me and proceeded to yell at me for the next hour; calling in any senior manager to yell me at about the importance of starting early and how maxing out a 401k for 40 years allows for a much more comfortable retirement. Talking with your boss also allows for you show your worth and ask for that most important raise! Remember; bring hard facts of what you have accomplished, data to support what you hard work has generated for the company and a goal for your raise. Aim high to start so if the number comes down in negotiations you still come out on top!
There it is 4 conversations to have in the next month — one per week. You will learn from others failures and successes as well as build stronger relationships. And here is one more:
A Trusted Advisor — Seek out an advisor who will help guide you in your financial journey. Remember; not all advisors are the same so focus on a fee based (or fee centric) advisor and avoid the insurance based scam artists. Work with an advisor who will charge you a reasonable fee to answer your questions, help with a financial plan and if available manage your assets in a low cost way.
If you need someone else I am always here as a resource!
Take care. Be kind. Chase your dreams.