3 Crucial Lessons About Money Milestones for Young People
Content provided by Moven
The pressure for most young people to meet certain money milestones is never-ending. Day in and day out they’re being hit with broad financial advice only serving to remind them of all the things they need to do before they graduate college or get married if they want to avoid permanent financial limbo. The truth is, the major expectations that defined a fruitful financial life in the past have rapidly changed. As a result, the financial advice you people are receiving should be changing too – yet most financial chatter is preaching the same tired advice as 20 years ago and it needs to stop. Next time you miss a key money milestone or feel the pressure to figure out how to save for retirement even though your paycheck definitely doesn’t allow it, remember it’s OK and consider these lessons.
1. Our values are changing and so should the way we think about money
Previous generations might be tempted to look at millennials and generation Z missing money milestones, like not starting a 401(k), and feel that it’s a result of irresponsibility or frivolity. In fact, most millennials are likely perfectly aware they are making different choices than their parents or their grandparents. The world has changed and life through a different lens means different choices and different values – especially when money is concerned. Twenty or 30 years ago most people’s goals were owning a car, buying a big house in the suburbs, and working their way up the executive ladder until they could retire. Basically, you grew up, went to school, got a job, bought a house, and took a pretty linear path toward financial health, if you were lucky.
However, over the past two decades our values have shifted as technology, mobile apps, and a difficult financial climate emerged as the new reality. Owning an automobile becomes less of a priority when there are services like Uber, ZipCar, and other ride shares. Instead of one career, millennials are able to accumulate a variety of skills through online courses, learning apps, and the increased flexibility to make education and career goals a lifelong process. Essentially, as a young person today you should feel entirely empowered to make the system work for you instead of following an outdated set path. While it may feel like missing a milestone means you aren’t in control of your finances, in fact you should feel inspired to figure out other methods of managing your money than the standard advice passed down from generation to generation.
2. Embrace the culture of “life hacking”
Young people today have more options than ever to take control of their finances. Instead of setting aside a certain dollar amount each month to pay back student loans or save for an engagement ring, millennials can start a part-time Etsy shop if they’re exploring their crafty side or join up for Postmate deliveries on the weekends to make some extra cash. Everyone’s financial situation is different and it’s not to say the old methods and advice aren’t sound, it’s simply that they aren’t enough to cover all the different channels young people are pursuing when building new skills and making money.
If anything, millennials should be demanding better advice and better tools for managing all the potential life hacks they can be taking advantage of. Tools like Moven can help them manage their spending in real-time and learn what financial behaviors will lead them to success. Robo-advisors like Betterment can facilitate DIY-investments and services like CommonBond can help manage those student loans while you are figuring out the rest of your finances. As technology and the mobile-first world continue to grow we’ll only see more and more solutions for achieving a positive financial future not found in traditional advice columns.
3. Money is becoming less taboo, and that’s a good thing
Money has always been a largely taboo subject, but the great news is that technology continues to open new doors for talking about money. As millennials embrace new values we can start to define what the new money milestones actually are. In a world where paying a friend back is as easy as a few taps on your phone, money has become a much more social interaction and therefore a real motivator in getting our finances under control. Millennials might be the first generation ready to have truly frank discussions with their friends and loved ones about money and how they want to manage it. If this happens, some of that usual money milestone pressure might finally dissipate.
We’re living in a world full of new money milestone possibilities and it’s about time the advice caught up. It’s okay you didn’t start a 401(k) by the time you were 30 and it’s okay you decided to pick up a freelancer project to pay back your student loans instead of tucking your regular paycheck away every month. In this new world financial health can be much more about making it work for us, instead of trying to fit old milestones into our new way of life.
Alex Sion is President and C0-Founder of Moven. Follow him on Twitter.