According to a report in USA Today, people in their 20’s do not spend a lot of time budgeting their money. That includes saving receipts, monitoring what they spend or cutting back on spending. Instead, many Millennials are more concerned about finding employment, paying back their student loan or spending time with family or friends. The energy it takes to establish a budget is consumed elsewhere. However, a failure to budget can also have long-term consequences for anyone in the 20-something age group.
A New Financial Influence
The USA Today report claims that almost 45 million people in the US are classified as Millennials, thereby making 20-somethings the largest age group in the US. As a result, the saving and spending habits of this demographic can shape the economic future of the country, all which makes financial tracking a necessity.
Some of the challenges that Millennials deal with when budgeting include the following:
When the economic recession took place, a 2013 study revealed that six out of 10 Millennials held jobs, with 30% of that number only working part-time. With a large number of young people underemployed or working part-time, it is not surprising that they have not established a budget.
In addition, a 2014 study showed that only 18% of 20-somethings could answer four or five fundamental questions about finance. Because most colleges do not usually include personal finance in their curriculum, Millennials often learn about money management from parents. For any young person who does not have this kind of exposure, budgeting can be even harder to follow. Either that, or it does not hold the interest of someone in this age group.
Young people are also affected by peers, whose spending is a major priority. As a result, socializing with friends whose salaries are larger can prove to be difficult. However, Millennials, according to financial experts, can overcome some of their budgeting challenges by using today’s technology and setting up automatic savings plans. They can also use online tools to establish their budgets and their savings goals or needs. For example, instead of saving $600 per month from their income, they might try saving 10% of their monthly income and include it in their savings.