Secrets to Saving and Investing

Hey Millennials!

Welcome to the Millennial Financial Times tribe! We’re excited to have you with us. "Stay Informed, Stay Ahead: Financial Updates for Millennials." Every Tuesday at 6 am EST. Let’s get started!

What we have for you today!

• Question of the Week

• Answers to Last Week’s Question

• Data Points of the Week

• Warren Buffett once said: "The best investment you can make is in yourself."

• Top Stories of the Week with Our Opinions

• Stories We’re Following

• Political Corner

• Book of the Week

• Quote of the Week

QUESTION OF THE WEEK

"Which budgeting tools or apps do you find most effective for managing your finances, and what specific features make them useful for your needs?"

How to Participate: Reply to this email with your answer, and we'll feature some of the best responses in next week's newsletter!

ANSWERS TO LAST WEEK’S QUESTION

Last week’s question was, "What’s the biggest money lesson you’ve learned in the past year, and how has it changed the way you manage your finances?"

Here are three of the answers we received:

• "This past year, the biggest money lesson I’ve learned is the importance of having an emergency fund. I used to think I could always rely on credit or just get by month-to-month, but when my car broke down unexpectedly, I realized how vulnerable I was without savings. It was a stressful situation that made me rethink how I handle my money. Now, I’m actively setting aside a small portion of each paycheck into a savings account dedicated solely to emergencies. It’s not a lot, but knowing I’m building a cushion has given me a sense of financial security I didn’t have before." (Kathy T)

• "I learned that investing is way more satisfying than splurging on things that don’t really matter. At the start of the year, I was spending a lot on eating out and buying stuff I didn’t need. When I reviewed my expenses, I was shocked at how much I was wasting. So, I decided to cut down on those unnecessary expenses and redirect that money into stocks and a retirement fund. Seeing my investments grow, even a little, feels way better than a fleeting moment of happiness from a new gadget. Now, I think twice before spending and prioritize long-term gains over instant gratification." (Arlene F.)

•  "The biggest lesson for me was understanding the true cost of living independently. Moving out on my own was both exciting and daunting, but I didn’t realize just how many expenses come up that you don’t anticipate—like utility bills, repairs, and even grocery shopping. I had to learn to budget properly, distinguishing between wants and needs, and making sure I didn’t fall into debt. I started using a budgeting app that tracks my spending and alerts me when I’m overspending in a category. It’s changed how I view money—I’m much more conscious about where it goes and how it aligns with my future goals." (Jonathan W)

DATA POINTS OF THE WEEK

According to a 2024 Schwab Wealth Survey…

• 31% of millennials say they learned about investing at a young age.

• 19% of millennials say they were taught about investments in school.

• 41% of millennials believe financial education is more available now.

WARREN BUFFETT SAYS
“the best investment you can make is in yourself.”

Here are five key lessons millennials can learn from him relevant to navigating one’s financial journey:

1. Prioritize Financial Education: Investing time and effort in learning about personal finance, such as budgeting, saving, and investing, can pay dividends throughout your life. For example, millennials should consider reading books or taking online courses on financial literacy to make informed decisions.

2. Start Investing Early: Even small investments can grow significantly over time due to compound interest. Millennials could start with micro-investing apps like Acorns or Robinhood to gradually build their portfolios.

3. Focus on Long-Term Growth: Buffett's emphasis on long-term value suggests that millennials should think beyond quick gains and focus on sustainable financial growth, such as contributing consistently to retirement accounts like a 401(k) or IRA.

4. Reduce Debt Strategically: Just as Buffett avoids unnecessary expenses in his investments, millennials should aim to minimize high-interest debt, like credit card balances, which can drain financial resources over time.

5. Invest in Skills and Knowledge: Beyond finances, professional skills and knowledge can increase earning potential. Millennials can attend workshops, earn certifications, or learn new skills to advance their careers and increase income.

These lessons offer practical strategies for millennials to build a strong financial foundation. They emphasize the importance of education, discipline, and long-term thinking in achieving financial success.

OPINION
Wow, only 9%? That's frustrating but not surprising. It feels like no matter how hard we work or save, we’re stuck playing catch-up in a game that was rigged long before we even got started. And to think Boomers had double that at our age! It's tough knowing the deck is stacked against us, but it just makes us more determined to find new ways to build wealth and break out of this cycle.

"It's hard not to feel discouraged when you see stats like these, but it also feels like a wake-up call. Maybe it’s time to get more creative with our finances—like looking into alternative investments, side hustles, or even just getting more vocal about the systemic changes we need. We might have less wealth now, but we’ve got resilience, and we're not just going to sit back and accept that 7% or 9% is all we get."

Here is the gist of this article: “Wealth concentration is also evident among different generations. In the U.S., most wealth is concentrated in older generations, with Millennials owning only about 9% of the total wealth. By comparison, Baby Boomers held around 20% of the wealth at a similar age. In 1989, individuals under 40 controlled 12% of wealth; today, that number is closer to 7%.”

Retirement: How millennials and Gen Z can catch up on savings

Yahoo Finance

Highlights

• 📊 Fidelity’s survey shows Gen Z saved $11,300 and Millennials $59,800 for retirement.

• 🔍 Experts recommend saving 1x salary by age 30, 3x by 40, and 10x by 67.

• 💡 Job-hopping among younger workers may impact 401(k) savings consistency.

• 🎯 Aim for 10-15% salary savings; utilize employer matches for effective savings.

• 📈 Start saving gradually; use raises to boost retirement contributions.

• 🚨 Importance of emergency funds; avoid being underinsured for financial security.

• 🎉 Enjoy life, but balance between spending and saving for future needs.

Key Insights

• 💰 Savings Gap: The significant difference between actual savings and suggested targets highlights the need for better financial planning among young adults. Many have not prioritized retirement savings early on.

• 📅 Long-Term Planning: Setting clear savings milestones (like 1x salary by 30) can guide Millennials and Gen Z in their financial journeys, emphasizing the importance of starting early.

• 🔄 Account Management: Young workers should actively manage old 401(k) accounts through rollovers to avoid losing track of their savings, which can accumulate over time.

• ⚖️ Debt vs. Savings: Balancing retirement savings while managing student loan debt is crucial; prioritizing employer matches can significantly enhance savings.

• 🔑 Financial Literacy: Understanding personal biases and impulses around spending can help create better financial habits and long-term goals.

• 📉 Insurance Awareness: Being underinsured poses significant risks; young adults should prioritize adequate health and renters insurance to protect against unforeseen events.

• 🎓 Education and Resources: Seeking guidance from financial advisors can be beneficial, especially for budgeting and savings strategies, but it’s essential to consider the costs associated with professional advice.

How Jane Paid Off $30,000 in Student Loans in Just 2 Years 

by Bob Savar, Medium

In today's world, student loans can feel like an overwhelming burden, hanging over your head like a dark cloud. However, Jane's inspiring story of paying off $30,000 in student loans in just two years proves that financial freedom is achievable with the right strategies and a determined mindset. We are here to break down Jane's journey and the actionable steps she took, providing you with a detailed roadmap that could help you do the same. From aggressive budgeting to multiple income streams, Jane's methods offer a comprehensive approach that can be tailored to fit your financial situation. Read the entire story.

• The Dream Job with a Hidden Price Tag by Bob Savar, Millennial Financial Times

• Is the Retirement Picture for Millennials Looking Better? by Darryl Hicks, NRMLA

• We Should Talk More About Money by Alain Guillot

• Millennials and Their Pursuit of Financial Independence: A New Era of Freedom by Bob Savar, Millennial Financial Times

• Millennials: How Much Risk Should You Be Taking With Your Retirement Savings? by Yael Bizouati-Kennedy, Aol.

• HOW MILLENNIALS ARE REDEFINING WORK-LIFE BALANCE
  by Nick Baker, Lifestyle News

• After 10 Years Of Marriage, My Husband And I Still Don’t Share Finances by Brooke Nierling, Millennial Magazine

• Retirement: Top 5 things for millennials and Gen Z to consider with Anne Lester and Robert Powell

• Co-Living In New York: Affordable Housing Solution Or Millennial Trend? LandlordTODAY

• Bankruptcy Boom: Why More Young Adults Are Drowning in Debt by Natalie Campisi, Forbes Advisor

• Millennials Have Turned The Tide On Retirement Readiness, Report Says by Financial Advisor

• Millennials Will Continue to Quiet Quit and Gen Z Will Follow Their Lead By Anthony W. Haddad, GV Wire

Money Skills for Young Adults Now: A Millennial’s Guide to Financial Freedom and Security 
by K. Connors

The staff at Millennial Financial Times gifted “Money Skills” to several of our millennial readers, asking for reviews. Here is one that sums up the general consensus:

I found “Money Skills for Young Adults” by K. Connors, to be a surprisingly engaging and informative guide. The author does a great job of breaking down complex financial concepts into relatable terms, making it easy for young adults like myself to understand and apply.

One of the things I appreciated most about this book was its focus on practical advice. Connors provides actionable steps for budgeting, saving, investing, and managing debt, making it a valuable resource for anyone looking to improve their financial situation. While the book may not delve into advanced financial topics, it serves as a solid foundation for building a strong financial future."

"It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for."– Robert Kiyosaki