Nearly two-thirds of the millennia say they live a lifetime of paycheck, and only 38% feel financially stable, according to a new survey by Charles Schwab.
Millennials, more than any other generation examined by Schwab, feel most insecure about their finances. According to about 380 billion (23 to 38 years old), it has been examined for Schwab's 2019 Modern Wealth Report.
But the millennials also say they spend an average of $ 478 a month on "non-essential" purchases, such as dining, entertainment, luxury, and holidays. There are less than $ 587 Gen Xers reporting expenses, but more than $ 359 used by baby boomers.
"It may seem strange that when we look at statistics that say so many thousand years, it is the pay promise to paycheck, but on the other hand they are overspending," says Farnoosh Torabi, private finance author and host of the podcast "So Money" . . Schwab cooperates with Torabi's Stacks House, a pop-up experience that promotes economic independence for women.
But while it may seem counterintuitive, it is the reality many thousand years ago, she says. "When your financial life is in disarray, the chance you want to transfer is," she tells CNBC Make It. "Emotions around money lead us to make irrational choices."
It's Not Just a Consumption Problem
It may be easy to criticize the millennia to just spend too much, but other issues are also at stake, Terri Kallsen, Schwab's Vice President of Investor Services, says CNBC Make It.
"Expenses are not the enemy that we may think it is," she says. As a generation, millennia also faces systemic economic problems that can feel overwhelming. They generally carry more debt than previous generations did at their age, for example. A big reason for that is student loans. The number of households with student loan obligations doubled from 1
Student loans are not the only type of debt millennials hold. About 40 percent of the millennia (defined here as the 20 to 35 year olds) have credit card debt, according to a recent LightStream survey, SunTrust Bank's online lending department.
Millennials age 25 to 34 had an average of $ 36,000 in debt last year, excluding Northwestern Mutual's 2018 Planning & Progress Study.
Increasing housing costs and the fact that wages just don't go as far as they once did to cover the necessities also add to the pressure.
"When you're saddled with student loan debt, when you have credit card debt, when you don't have a lot of financial expertise, it can lead you to make unhealthy decisions with your money, including over-spending," Torabi says. 19659006] It's about finding "balance"
While managing your money is part mathematics, most of the thinking comes, says Torabi.
Add Kallsen: "We want people to have good experiences in life, but most important is that people find the right balance so that spending does not affect their long-term financial security."
You have to find a strategy that works for you and lets you reward life experiences and save for the future. – Too much of one thing is not good for the general biochemistry, says Kallsen. "And too much of a thing, from a financial point of view, is not a good thing for your overall financial plan."
If you try to reduce spending, the first step is to organize what you use and how to use it, said Saundra Davis, CFO and adjunct professor at Golden State University, CNBC Make It. "Know where you are and know what you want," she says.
Be very clear with yourself about what you want and what is possible. And be realistic, she says. Don't expect yourself to immediately go away from saving nothing to spend $ 400 a month. If you can barely save $ 40, start saving $ 40.
Surround yourself with people and influences that will help you make healthy financial decisions. "If you are doing people who are constantly spending money and are constantly following the Joneses, guess what – it's going to have a big impact on your bottom line, too," says Torabi.
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