I’m a Millennial. Here’s how I budget
A #hottake that doesn’t mention avocados.
BY COLIN LALLEY
This article originally appeared on PolicyGenius.com.
“Millennial” is the greatest insult someone who crashed the modern economy via subprime mortgages can call another person. Remember when replacing “Millennial” with “snake people” was big a few years ago?
But I’m here to tell you that Millennials are people, too, so there’s no need to be mean. We’re just like you, but maybe a little more into Harry Potter and Pokémon, and a little less into Applebee’s (you’re welcome). Oh, and we might budget a little differently.
Not that differently. But Millennials are in a different place than, say, Xennials, and that affects our money habits. Yes, there have been approximately one trillion articles written about Millennials and money. Here’s another one.
Being a spoiled #Millennial made me better with money.
Millennials have a reputation for being spoiled and receiving participation trophies (Note: I have yet to find evidence that participation trophies actually exist, but they make a good boogeyman). And I was pretty spoiled growing up. But here’s the thing: It actually made me better with money.
My parents bought a car that my older sister and I shared all the way through high school and college. When I graduated from college, I lived at home for a few years while I saved up enough money to buy my own car (a Ford Contour can only last for so long, especially when it no longer holds power steering fluid and becomes as maneuverable as a fridge). Speaking of college, my parents paid for almost all of it — and I was done paying off student loans within a year after graduating.
It would be easy to see how this would make me wildly irresponsible with money. But the thing is, none of this existed in a vacuum. My parents paid for things, but I knew what was going on. Money lessons were instilled from an early age. Clark Howard was a staple on the radio during road trips. When I was seven years old, my allowance had to be divided between spending, charity, and stocks. I’m still not entirely sure I own those stocks, but message received.
My parents never put me in debt, and now I never want to be in debt. I use a credit card, but pay it off in full every month. I don’t buy things unless I know I can pay for them. I have an emergency fund. It was really nice not having to worry about money growing up, and I don’t want to worry about it now.
I’m all about financial apps…
The iPhone didn’t come out until I was in college, but that still means I’ve spent basically all of my adult life with a smartphone. There are a lot of benefits to smartphones — I never have to know where I’m going ever again — but one of the biggest is all of the financial apps that are out there.
Admittedly I might be predisposed to seeing this as a huge boon, considering I like technology and write for a personal finance blog, but I can’t be the only one. Budgeting apps are only outnumbered by however many Angry Birds games have been released. There’s a reason why we can write about so many of them, and I’ve tried just about all of them, from Clarity Money to YNAB.
And it didn’t start with apps. I was a Mint user even before it was bought by Intuit. This probably plays into another Millennial stereotype, but I’d rather do literally every banking thing online than in person, and don’t remember the last time I had to go into a bank (it helps that I bank with USAA and Schwab, who don’t have many physical branches).
Venmo is hands down the easiest way to transfer money to pay for shared utilities or anything else (although I was excited this past weekend when I saw the option for Zelle in my USAA app. Yes, that got me excited, shut up. My girlfriend didn’t seem to care as much). I have a Vanguard account, but have to admit that Betterment and Wealthfront are much more aesthetically pleasing and user-friendly.
Then there are the non-financial apps that have big financial implications. I’ve subscribed to Netflix and Hulu for a while, but YouTube TV means I finally have a good cable alternative. With FreshDirect, I don’t even have to go to the grocery store. Technology has had a huge impact on how I manage money, but also on the way I spend money.
…even though they can get overwhelming…
The good thing about all of this app stuff? I can access my finances from anywhere (or at least anywhere I have my smartphone which, let’s be honest, is everywhere).
The bad thing about all of this app stuff? I can access my finances from anywhere, and I sometimes I’m compelled to.
Is it possible to be too hands on with your money? It feels that way. Like I’m missing the forest for the trees, that I’m so worried about having an app set up just so, and I spend more time tweaking and setting up automation than I would checking in every now and then — and I still have the same level of financial awareness.
If you’re like me, you go through bouts of obsessively checking apps to see what you’re spending money on. If you are, there’s good reason: Developers want us to keep using their product, so they introduce elements of gamification to keep us coming back for more. I’m still looking for the perfect app that walks the fine line of being helpful without making me feel like I need to regularly unplug.
Maybe #kidsthesedays won’t have this problem because they’ll have been plopped in front of an iPad since they were a toddler and they’ll have better impulse control when it comes to opening apps. Stay tuned for a follow-up article 18 years from now.
…and the ease of apps can lead to money mistakes.
Budgeting apps can (ostensibly) help you save money. Just about every other app, though, can make it harder.
I’m not just talking about when Amazon has to refund $3 billion because babies keep making in-app purchases. Why wait for the subway when I can just hail an Uber? Why spend time cooking dinner when Seamless is so much easier? How many subscriptions do I have because signing up from my phone was so easy and I just never took the time to cancel them. Really, is it worth figuring out how to unsubscribe from Medium when it’s only five bucks a month?
I like to think I’m good with money, but I’ve spent a lot of money just because my phone was right there. If The Financial Diet is any indication, I’m not the only one. Every now and then I have to take stock of the money I’m spending that I don’t even see because it goes from bank account to app — and remember, never be afraid to uninstall an app. It could save your budget.
“Experiences over things” is actually true.
If you google “Millennials experiences over things” you get over a million results. It’s cliche, but I think it might actually be true. I hate when that happens.
I don’t really buy a lot of “things” anymore. Sure, there are a few big ticket items I want every now and then — I’ll save for a new smartphone or Nintendo Switch — but it’s not very often. Most of what I want I can get through one streaming service or another. (Or the public library! Because Millennials are the generation most likely to use the public library! Seriously!)
But a recent trip I took to Iceland was the best purchase I’ve made in recent memory. Most of my money is spent on food, and I feel a lot less guilty when I’m eating out with someone than when I lazily order a Seamless meal.
So I budget accordingly. If I know there’s something coming up that would potentially break the bank, I start saving early. I have a separate bank account for big purchases that doesn’t get touched unless it’s for something specific.
I’m still trying to find the right financial path.
There’s been a lot of ink spilled about Millennials in the workforce: We switch jobs constantly, we want to do something that matters, we’re less likely to retire than other generations.
Money feels the same way. I’m on the right path, but am I going to care about owning a home one day? Should I use a 401(k) because I always have, even though I might get a better ROI somewhere else? There are so many investment options out there, how can I be sure that I’m using the best one?
When I’ll figure all of this out is one big ol’ emoji shrug. But I’m not that concerned about it. I think these concerns are universal, not Millennial. No how matter how much prep work you do, there’s always a “what if…” when it comes to our money. We can control a lot, but we can’t control a recession or a housing shortage or getting laid off. Everybody has a plan until they get punched in the face, after all. Sometimes all we can do is damage control.
Maybe I’ll never own a house, and if that’s the case, everything will still be fine. Especially if they crash the housing market again.
Colin Lalley is a writer for PolicyGenius. For more on life, money, and other topics, visit our blog.