Nearly two-thirds (64%) of working millennials say they will never accumulate $1 million in savings over their lifetime, according to the Wells Fargo Millennial Study. Six in ten (59%) of millennials have started saving for retirement, whereas 41% have not. Of the millennials who are not saving for retirement, 64% say they are “not making enough money to save for retirement.” The Wells Fargo Millennial study was conducted by GfK and surveyed over 1,000 U.S. adults between the ages of 22 and 35, with an additional oversample of 500 Hispanic millennials for comparison purposes. (source:wellsfargo.com).
We originally started oXYGen as an XY company, so it is only fitting that we help this 64% with five key money tips on how to retire with a million dollars.
- Be An Avid Bill Shopper
- First and foremost, make sure you shop your student debt which will likely be the number one initial inhibitor to long term wealth building. Make sure first, that if you have private loans that you look to refinance them to get the lowest rate as possible given the current interest rate environment. In addition, make sure you are on the income based repayment plan so you aren’t putting more of your income than necessary toward the debt each month.
- Second, you should bill shop first and budget second. They don’t teach budgeting in high school or in college, so rather than starting with a budget, instead go out and take every bill you have and call your carrier to see if you can get a better deal.
- Get Started On The 401(K) When There Is A Match
- No matter what your situation, if your employer offers you FREE money in the form of a matching program, you need to take advantage of it right out of college. This could be a 25%, 50%, or even 100% return on your money. This strategy is doubly good if you don’t have any vesting period at all.
- The earlier you get started, the more of a chance you have to hit the million dollar mark because of the time value of money to allow your little snowball to turn into a big snowball.
- Job Hopping May Not Be A Good Idea
- This is in my mind the WORST mistake that millennials make in their finances. Most of the successful people I have seen do well in their personal finances often stay in the same job for 10, 15, 20 years or more. Not only will you have to start all over again on the corporate ladder and potentially have relocation expenses, but more importantly the real question is what benefits are you leaving on the table?
- Be Wealthy, Not Rich
- You should avoid luxury items that will depreciate such as a fancy car. Saving the difference between at $600 monthly payment for an automobile and a $400 payment could be the difference of you getting to become a millionaire. Real wealth is what is on paper, not what material possessions that you have.
- As your income increases, save one third of every raise to protect against lifestyle inflation.
- Do NOT get caught up in social media
- Your friends don’t put their net worth statement or how much debt they have on Facebook, Instagram, or Snapchat. Just remember that when you see that they were front row at a concert, on a first class vacation, or driving a new ride.
Use these five money tips as a millennial to help yourself retire with a million dollars.
Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO ofoXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.