Millenials and the World of Finance
We came across a great article recently penned by Kate Connor, Protection Development Manager at Irish Life. In the article, Kate identified some really interesting insights into the world of millennials – people born between 1981 and 1996, and some of the challenges that this particular cohort of our population are facing.
It got us thinking too about some of the personal finance areas that millennials should be considering if you or your children are in this age bracket, you might find it interesting.
Financial Challenges Facing Millenials
Many started their careers during the Great Recession of 2008-9 and all that ensued. Unemployment rates were high, salary levels were depressed and job stability was in short supply. A difficult backdrop to their early careers. And then just as their careers were settling down a decade later, along came Covid-19. More job losses, reduced incomes and uncertainty.
Millennials have managed this as best they could. They have done further study, have been extremely resourceful and creative in carving out new and different careers and have embraced the “gig economy”. Making the best of a poor hand of cards…
This tough start to their careers has had quite an impact on the personal finances of this generation, when compared to previous generations. We see lower rates of savings, lower rates of home ownership and families being started later. We also cannot dismiss these challenges, thinking that they have lots of time on their side, given some have already turned 40!
As a result, they are facing significant financial commitments such as young families and mortgages much later in life. So this takes careful planning and close management of often limited financial resources.
So what should millennials do?
There are no easy answers and of course every person’s circumstances are unique. But the following should definitely be considered among financial priorities.
1. Get expert financial advice:
Don’t go it alone and try to muddle through, as every euro counts. Excellent financial advice will help you to make the most of limited resources.
2. Keep upskilling:
Millennials have proven their resourcefulness and ability to change. The world of work is changing and more skills are a critical input to optimising flexible and ever-changing careers.
3. Avoid unnecessary debt:
Credit card balances are the devil, and are simply wasted money. Avoid credit cards completely, or pay them off in full – every single month.
4. Know your investing timeframes:
You need your money working as hard for you as possible, and you need to ensure your asset allocation matches your risk profile and investment timeframe. Be clear about your investment goals.
5. Don’t ignore retirement planning:
Retirement may look very different for millennials, with people potentially working later in life than their parents did. But retirement in some form will come to all and will need to be funded. This needs to start now.
6. Consider “later in life” challenges:
Make a will, start considering estate planning and also consider long terms care costs. As people may live longer due to better healthcare and diets, the requirements for long term care later in life will likely increase. This will need to be paid for…
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