I recently had the opportunity to spend some time with Jason Dorsey, chief strategy officer for The Center of Generational Kinetics. Known as the Gen Y Guy, Jason is an acclaimed keynote speaker, generational researcher and best-selling author. Over the next few weeks, I'll be sharing insights learned from Jason in a three-part blog series where we include actionable retirement savings recommendations for a variety of audiences. This is our first Retirement Tips from the Gen Y Guy post.
My visit with Jason followed on the heels of some extensive millennial research I was involved in, to gain a better understanding of how millennials save and prepare for unexpected expenses. Through this study, we discovered that while a large percentage of millennials are saving earlier and understand how much they should be saving, they still aren't saving enough. The research also revealed that 63% started saving before age 25, but less than one-third were saving at least 10%. Despite this, nearly 75% of those surveyed believed that 10% should be the minimum percent saved. Given these results, I asked Jason "What can Millennials do to avoid shortchanging their retirement?" Below are Jason's top three tips, based on his research:
- Hey millennials - listen up! Here are three savings tips targeted at you! (Yes, you!)You need to start talking about money. Most millennials are either working a lower-wage job or are still working toward a career, and taking longer to get there. Neither of which provides most millennials with disposable income. But just because you don't have money, doesn't mean you shouldn't talk about it. You need to start talking about money in a way that makes you feel more comfortable, confident and in control. In fact, millennials were taught not to talk about money. This resulted in a lack of peer support and urgency to save and invest (even in small amounts), both of which could dramatically impact your lifestyle and freedom as you get older.
- The easiest way to start talking about your money is to understand how much you have - like right now. Step one is to simply track all your expenses for one month and see where your money goes now. The key word there? SIMPLY. It doesn't matter if you use a fancy app, pen and paper or in the notes section of your phone. For most millennials, this one task can be a real eye-opener. You may think you know where your money is going, but nine times out of 10, most folks won't believe how much they're actually spending and on things they didn't think would add up to much.
- Talk with a financial advisor. No, you don't need Scrooge McDuck-amounts of money to meet with a financial advisor. Heck, if you're worried about it, start off by asking an advisor out for coffee so you can pick their brain on what it would take for you to retire--or even only work three days a week! Meeting with a financial advisor changed my life. He taught me that being afraid of money only makes you feel more helpless and eventually frustrated. But learning about money, saving and investing allows you to create an actionable plan to reach your goals. My personal belief is just because you are a millennial (and probably don't carry cash), doesn't mean you shouldn't know what to do with your money - and how to make it work hard for you!
Watch Jason share more millennial insights on money at JasonDorsey.com.