Although the times may have changed and there are many differences between the modern Millennial, Gen Xers, and boomers; saving and preparing for the future is still important for a stable and secure financial situation for everyone. In fact, the impact of saving vs. not saving for a Millennial is tremendous and can be life-changing, as shown by the comparison here of each chosen pathway: the saver and the non-saver.
The first type of Millennial is a planner who prioritizes saving early in their career. This savvy saver makes it a point to stick to their monthly budget, sets up regular contributions to savings accounts, and seeks out investments to secure their financial future. They understand the importance of saving and investing now while they are young and will reap the benefits of their savings habit by being able to invest in a home at a younger age and will have financial security during unexpected life events.
The second type of Millennial is a non-saver who prioritizes buying things over saving money. The Millennial spender would rather take vacations, buy nice cars, and spend their money for immediate gratification rather than plan for their future. They often feel that they work hard for their money and should be able to have the things they want as soon as possible. Unfortunately, these spenders do not understand what it takes for financial security and often find themselves facing challenges due to their lack of savings, including the delay of major life events like buying a home and difficulty in handling unexpected emergencies due to lack of planning.
The choices of savers and non-savers definitely have an impact on the lifestyle, opportunities, and stress levels of the average Millennial. Those who are savers will find themselves in a better situation – financially and emotionally, while non-savers will likely be stressed out and living paycheck to paycheck.
Planning and saving now can help avoid long-term consequences that can affect many aspects of your life in the future. Those who save and plan at an early age can expect to be ready for retirement, have financial independence later in life, and offer security for themselves and their family.
Unfortunately, the long-term impact of not saving offers no preparation for retirement, a lack of financial independence, and puts you and your family at financial risk in the event of an emergency or life event for which you are unprepared.
Learning to save now, even if it is a small amount, is a savvy move that will help secure your financial future. Being unprepared for life’s unexpected curveballs is stressful and can be avoided by preparing now. A smart Millennial who saves now is setting themselves up for a more enjoyable and stress-free lifestyle where they can afford what they need and want.
According to a report by the National Institute of Retirement Security, about 66% of working Millennials have not started saving at all, with only 5% of Millennials saving adequately for their future.
No matter your financial situation, it is important to start saving now. Here are some financial tips for Millennials to start building for the future:
If you are looking for trustworthy financial advice or a reliable checking account, savings account, or credit card to help keep your finances on track, contact Allegiance today!