Is your student loan debt getting in the way of finding financial security?

12/29/2016 03:05 pm ET Updated Dec 29, 2016

I’m a huge believer in living in the moment, being present and seizing every day. But when it comes to managing money, there comes a time we need to set down the hats and horns and settle for a meal in a box. (Just add hamburger! The bacon cheeseburger flavor is a guilty pleasure of mine.)

Live a lot!
Jerry Patterson
Live a lot!

I was involved in a new research project* at Principal involving 2,400+ millennials and Gen Xers, who had one thing in common: they’re all near or at the maximum amount that they can contribute to their employer’s 401(k) accounts ($18,000 for 2016). In addition, most saw themselves as middle class and many carried substantial student loan debt (almost 20% of millennials surveyed carried more than $100,000). I often hear millennials say they can’t see past their student loan debt, much less start saving for retirement. However, for these millennial and Gen X super savers, they’re doing both – managing their debt and saving for retirement.

While there were many differences among those surveyed, there was one theme that was consistent across the entire group.


Here it comes. (The mic drop moment…)

They’re all making material sacrifices today that will pay off tomorrow!

These super savers had the following goals in common:

  • Obtain financial security
  • Save for retirement
  • Live a healthy lifestyle
  • Raise a family
  • Have fun

Far and away, financial security outranked all other goals in terms of importance. The goals that didn’t perform as well? Having a big career, traveling and meeting new people.

A few other interesting insights from the research:

  • 71% are saving between $10,000 and $30,000 in 2016 (this means many of them are saving beyond their employer’s 401(k) plans)
  • 93% are saving more than their parents
  • Super savers are much more likely to rely on simple tools, calculators and articles to determine how much to save, versus more time intensive methods like webinars and podcasts
  • Of the super savers who work with a financial professional (about 25%), more than 81% don’t work with the same advisor as their parents; 83% of this same group indicated that they planned to stick with their current advisor for the next decade
  • Super savers invest relatively conservatively, with more than 50% describing their investment risk level between conservative and moderate and only 15% describing their risk level as aggressive

So how do these super savers intend to reach (and maintain) financial security? It’s by going back to the basics.

No matter how much the world continues to change, some things are better left alone. In this case, if you want to help ensure a safe and secure financial future, start investing in that future today. That doesn’t necessarily mean you have to give up your weekly caffè Americano (extra shot and whip, please), but it may mean you need to start thinking differently about some of the decisions you’re making.

Below are some of the key sacrifices these super savers make to help build a stronger financial future. They commonly:

  • Mind their budget on a daily basis
  • Drive an older car (might have to put the Tesla plan on hold)
  • Own a modest home (maybe not as drastic as a tiny house, but maybe something with a little further commute?)
  • Work more hours than desired
  • Say “no” to family and friends on common expenditures (like maybe this year’s white elephant gift exchange?)

The bottom line is that there is no silver bullet. It comes down to making sometimes hard, but important, decisions today to help ensure that things will be good (or better) tomorrow. But know that these decisions don’t have to mean living a life without fun. Despite their sacrifices, these super savers are still living a full life and seizing opportunities every day.

It just might be that they’re seizing these opportunities in a used compact car rather than a new luxury sedan (McConaughey not included.)

*Principal Super Saver Participant Survey, 2016 (conducted online Oct. 11-Nov. 1 among 2,424 retirement plan participants)

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