Does Your Financial Status Matter? For Half of Millennials, It’s All They Think About
You might assume that people in or near retirement think about money the most, but it turns out that millennials are more likely to be preoccupied with their financial status than everyone younger and older.
A new GOBankingRates study of more than 1,000 adults found that fewer than half of people from across the generations think about their finances “all the time” — all generations except for one, that is.
Read Next: Suze Orman: 3 Ways To Prepare for the Upcoming Financial Pandemic
Check Out: 6 Genius Things All Wealthy People Do With Their Money
Now between the ages of 28 and 43, millennials have money on their minds. While tuning into your financial life is healthy, are millennials obsessing unnecessarily — and are they even obsessing over the right things?
“It’s crucial to recognize and commend millennials for their dedication and determination, regardless of where their focus lies,” said Danielle Lucht, RICP, CDFA, founder of Everwell Financial. “Their proactive stance reflects a desire for improvement and a departure from traditional financial norms. Perhaps, by forging their own path, millennials hold the potential to achieve financial success where previous generations have struggled.“
No One Thinks About Money More Than Millennials
The study’s big bright spot is that no matter their age, almost no one is tuning out entirely. When asked what best describes how often they think about their financial status, fewer than 5% of every age group, from 18 to 65 and over, answered “never.”
From there, however, the generations diverge.
When asked if they think about money “occasionally, but not regularly,” one in three baby boomers ages 65 and up said they did. One in five older Gen Xers said the same, as did 17% of the youngest adults in Gen Z. On the other hand, just 13% of older millennials and only 7% of younger millennials reported having this nonchalant money mindset.
A full 40% of boomers said they think about their financial status “often, but not all the time,” with all the younger sets roughly tracking equally between 32% and 35%.
However, when asked if they think about money “all the time,” 57% of younger millennials and 52% of older millennials said that this extreme applied to them. Comparatively, less than half of every other age group reported this level of financial obsession, with only a quarter of boomers already in or near retirement reporting that money was always on their minds.
So, what part of their financial lives do millennials obsess over the most? Well, that depends on the millennial.
Explore More: How To Earn $4,000 a Month in Passive Income
A Millennial Money Pro Fixates on Homeownership Until She Gets the Keys
Melanie Musson, a finance expert with Clearsurance, is both a millennial and a money pro. For her, owning a home dominated her financial thoughts — and her singular focus brought the dream to fruition.
“I have bought a beautiful house, and I feel it’s my greatest financial accomplishment,” said Musson. “I prioritized a home above other important financial goals. It’s at the top of my mind, because I see it every day and appreciate it every day.”
Musson said that seeing her friends achieve the dream fueled her fixation.
“Comparison to peers played a big part in my decision to make home-buying my goal,” she said.
A Young Woman Enters Her 30s With a 20-Something’s Nest Egg
Bethany Hickey, who writes about money for Finder, is a 30-year-old millennial who frets most about her underwhelming nest egg.
“My ability to retire is a constant worry,” said Hickey. “I have a 401(k), but I don’t think it’ll be enough to retire comfortably. As a financial expert, I know my 401(k) is supposed to be equivalent to my salary by now, but it’s not even close, because my 401(k) is only four years old. I’ve had to adjust my retirement planning and look to other investment options like IRAs, high-yielding savings accounts and a financial advisor. With some extra work, it’ll likely work out, but that doesn’t stop the anxiety around it.”
A 32-Year-Old Seeks Balance Between Living Well Now and in Retirement
Aaron Wertheimer is a 32-year-old millennial who works as a copywriter specialist for the brand-building company Marketing Reel. Like Musson, he thinks about homeownership, but for him, a house is just one piece of a larger puzzle.
“As a millennial, I think about how I will be able to save money to buy a home and also invest in other real estate investments that will contribute to my ability to retire by the time I’m in my 60s,” he said. “But I think most about how to retire in comfort and luxury with the freedom to make investments as I wish.”
Enjoying Today vs. Saving for Tomorrow
As someone who values work-life balance, Wertheimer concentrates on weighing that priority against the necessity of saving for the future.
“Most importantly, I wonder how I’ll be able to work throughout my career while balancing taking time off every few years to travel,” he said. “I’d like to retire comfortably but also not work for 30 years without taking the occasional six-to-12-month sabbatical every five to 10 years.”
His motivation comes not from looking laterally to his peers, but up to his mom and dad.
“What keeps these thoughts at the top of my mind is watching how my parents worked like dogs all their lives, only to put off traveling, investing and exploring nature until they were old and their bodies could no longer move with as much gusto as when they were in their early adult years,” he said. “In essence, I don’t want to live an all-or-nothing lifestyle where I work for 30 years, watch the degradation of my body unfold, and then retire with money but not have the ability to spend the money on pursuits that enhance my physical health, because my body can’t move as well.
“I worry about finding the balance between retiring comfortably and living my life and spending money comfortably with spirit, energy and vitality in the years leading up to retirement.”
Some Millennial Money Stresses Are Worth Stressing About
Although Musson fixated on homeownership, she thinks that most other millennials would be better served to direct their financial preoccupations elsewhere.
“As a personal finance expert, getting out of high-interest debt should be a millennial’s top priority,” said Musson. “Saving for retirement should follow closely behind. Having a lifestyle that you can sustain through retirement is critical for security throughout your life. Both retirement savings and avoiding lifestyle creep are important to reaching that goal.”
Hickey thinks many of her fellow millennials stress most over the bill for college borrowing — and rightly so.
“Student loans are a major burden, and it’s downright silly to tell millennials not to worry about them,” said Hickey. “You can’t discharge them in bankruptcy, debt relief is slow-moving, and income-based plans require 20 to 25 years of payments for the remainder to be forgiven. To add insult to injury, student loan payments are factored into credit applications, so they can directly impact someone’s ability to get a home or auto loan.”
Overthinking About the Wrong Things Can Take Your Eyes Off the Bigger Prize
As a seasoned estate planning and elder law attorney, Marty Burbank, founder of OC Elder Law, is intimately familiar with the outcome of misplaced early-life financial preoccupations.
“Regarding the parts of their financial lives that millennials can afford to worry less about, it’s the pursuit of rapid wealth accumulation,” he said. “I’ve emphasized the value of long-term planning over short-term gains. Before looking for quick financial wins, ensure you have a protective umbrella over what you presently own or plan to acquire. This combination of asset protection and prudent financial planning can lead you to a secure and fulfilling financial future.”
The Experts’ Verdict: If You’re Going To Obsess, Obsess Over Saving While Reducing Debt
Lucht said the current economic climate has compelled many of her millennial clients to over-focus on debt reduction as they struggle with stifling student loans, credit card bills and car payments.
“However, in their pursuit of debt elimination, they often overlook the importance of nurturing their savings accounts and investing for the long term,” said Lucht. “This lopsided approach can lead to a precarious situation where they lack the funds to seize unexpected opportunities or navigate major expenses, perpetuating a cycle of debt accumulation.”
She’d rather see them pursue a “more sustainable strategy” that seeks an equilibrium of reducing debt while simultaneously boosting savings.
“By adopting a balanced approach akin to a teeter-totter, where debt reduction and savings growth are brought to a level plane, millennials can safeguard against unforeseen financial challenges while still making progress toward their long-term goals,” said Lucht.
Ann Martin, director of operations of CreditDonkey, agreed.
“If you’re a millennial, your financial focus should be twofold: pay off high-interest debt and save for retirement,” she said. “Some millennials are particularly vulnerable to credit card debt due to higher living costs, lower incomes and pre-established patterns of relying on credit to make ends meet. Unfortunately, many millennials have also fallen behind on saving for retirement, with a significant portion of early millennials in danger of not having enough saved.”
More From GOBankingRates
Suze Orman: 5 Social Security Facts Every Soon-To-Be Retiree Must Know
Here's How to Add $200 to Your Wallet -- Just For Banking Like You Normally Would
This article originally appeared on GOBankingRates.com: Does Your Financial Status Matter? For Half of Millennials, It’s All They Think About
