As a young millennial, I've noticed some distinct differences when comparing myself to other generations. Older people seem more on top of it when it comes to finances and responsibility—or "adulting," as we like to call it. For them, nest eggs, 401ks and job stability are all words that instantly come to mind when planning for the future. On the other hand, newer generations seem to have shifted away from this norm of saving as their habits, job styles and priorities appear to be taking a different direction.
A recent USA Today article dives deeper into this trend, citing the results from a survey conducted by Survey Monkey and the microinvesting app Acorns. The study reveals a significant gap in millennial understanding of financial management. Notably, 45 percent of 18 to 23-year-olds and 35 percent of 24 to 35-year-olds report that they have spent more on coffee than they have on investing in retirement.
While spending a few bucks every morning on a cup of coffee might not seem like a big expense in the moment, you could actually save huge amounts of money just by skipping the Starbucks line. In one month, $100 could be donated. In eight months, you can purchase an iPhone 7 Plus at over $700. And most importantly, you could accumulate $46,000 over 10 years from investing regularly in a 401k.
According to Jacob Funk Kirkegaard of Peterson Institute for International Economics, millennials need to “drastically change their financial behaviors and start saving towards retirement" because they will likely not be able to rely on social security once they're in their 60s.
At the end of the day, it’s not about coffee, but rather, your priorities and the future. To help you out, here are a few things you can do to gradually get financially healthy: Take advantage of financial offers from your employer, get an automatic saving plan and set a simple budget. There are tons of apps that can help, like Mint, Goodbudget and Digit. You can do this! Your future self will thank you.
