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Dollars & Sense: How will Millennials Reach Financial Independence?

By Roberta L. Nestor

Financial navigation in this new world is challenging and it is different.  Just ask any young adult.  The combination of college loans and lack of jobs are massive contributing factors that force 25% of Millennials to live at home with their parents.  Consider that 44 million US households hold a total of $1.4 trillion in student loan debt.  How will this generation achieve financial independence?  For Baby Boomers the ultimate goal was to be a homeowner and second to that was retirement.  This generation is just looking for a paycheck and the ability to live independently of their parents.  They are recipients of the Great Recession and their financial lives are different from any other generation.

I want to share an excerpt from a travel blog written by a 22-year old who defines what financial independence means to most Millennials.  “I have been (overly) fortunate to have two great parents who have always taken care of me.  I never wanted for anything or worried about money.  I know how rare that is and I appreciate it.  I was also taught to be as independent as possible so not having a job to pay my own way was conflicting.  I wanted to rely solely on myself, but school, grades, classes, social life, traveling, and so on hindered me from doing so.  Finding a job is much harder these days (I can attest through fellow peers’ experiences).  Add in a student loan debt, and it’s impossible to get on your own two feet once you graduate college.

I lucked out with this job.  They found me housing, placed me at a school to teach at and they give me a paycheck.  The 21st of each month, is pay day.  I keep thinking to myself, “I DID IT!  I AM FINANCIALLY INDEPENDENT!”  For the first time in my entire life, I can and have completely supported myself.  I paid my own rent, I paid for my own food, paid for my own phone, electricity, internet, gas, and water.  I did it all by myself.  Most people would be bummed at paying bills, but honestly, I am so proud I can finally pay my own bills.  I earned it.”

Financial independence is different for everyone and often determined by what stage we are in life.  This generation faces unique challenges.  There is a worthy website, “BrokeMillennial.com as well as a recently published book, “Broke Millennial – Stop Scraping by and Get Your Financial Life Together”.  Both authored by Erin Lowry.  If you have a Mill in your life, make it a point to share this book and website.  Other websites include www.YNAB.com (you need a budget) and for college debt consolidation or refinancing – start surfing the web.  There are more and more new companies such as SoFi, Earnest and CommonBond.  However, this book dedicates several chapters to understanding student loans and the most efficient ways to get rid of them, quickly.

Most books written about reaching financial independence spend several chapters discussing your “relationship with money” and your “feelings” about money.  Your relationship with money is formed long before your first credit card or college loan.  Many times, our feelings about money are determined by our family history and how our parents related to money.  Did your parents have open discussions about their finances?  Did they struggle to make ends meet?  Maybe money was not a conflict and money was never discussed because it was always available.  Either way, based on how you were raised you need to understand financial anxieties in order to pursue your independent financial future.  Ask yourself some questions:  How did I get money growing up?  When I did have money to spend, what did I buy?  Finally, what are my financial concerns today and why do I have these concerns?

Young, savvy, educated adults are struggling to move forward and to get ahead.  They need guidance and education on basic financial concepts.  Money gives you choices in life.  It can allow you to stop sleeping in your parent’s basement or to quit a job to be your own boss.  The basic concepts in “Broke Millennial are not new, however knowing how to apply them in today’s world is.

Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services.  She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser.  Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice.  You should consult a legal or tax professional regarding your individual situation.  Roberta can be reached at Nestor Financial Network, 203-876-8066 or roberta@nestorfinancial.com.

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