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A Note to Millennials: Money Helps Create Choices in Life

Money isn’t everything, but it certainly helps create choices in life. Yes, investing can be tricky with many options and fine print. Still, the biggest obstacle for the average person is not investing; it is the saving bit. Saving requires discipline and, in some cases, sacrifice. It means spending less than you earn, though you’re surrounded by lots of temptation.

Most people don’t bother to save. According to a survey from 2016 GOBankingRates, 69% of Americans have less than US$1,000 in their savings accounts—and 34% have no savings at all. Among older millennials with theoretically more time in the workplace (ages 25 to 34), one-third have US$0, and another third or so (35%) have less than US$1,000. Only 15% have more than US$10,000! Across the country, in various age groups, things are not much better.

Millennials are not entirely to blame. As you know, in the U.S. we live in a consumer society. The Center for Retirement Research reported this year that 52% of working-age households are at risk to not maintain their standards of living in retirement. I realize “retirement” is distant and intangible to you. And many today are redefining this life stage with work of their choice in a mobile society that you millennials are enhancing and expanding every day. (Thank you!)

Let’s not use the word retirement. Let’s call it “later life,” plus all the steps along the way. Consider that saving and budgeting supports a “rainy day” crisis, can help you grab hold of a dream you have, or can culminate in later life as an option to do more in the living of it.

Today’s technology is helping, from traditional Excel spreadsheets to budgeting and savings apps, robo-advisor investing platforms, and easy Google searches for personal finance education. Find the tools that work for you, such as budgeting, and learn about tapping tax-deferred accounts, such as traditional and Roth 401(k)s or IRAs, to aid with wealth creation. You are empowered to look at your financial life as a long journey, rather than as one event at a time.

The financial industry is learning, too: The goal-based planning method is growing. Efforts are afoot to improve the defined contribution market. Financial firms are working to diversify “later-life” streams of income to include self-annuitizing assets (you’ve heard about the Social Security crisis). Slowly evolving is a movement toward holistic financial wellness taking on both sides of a person’s balance sheet: debt and assets.

However, it only happens by starting in the time-honored approach. Pay yourself first with every paycheck you receive, even US$20 a clip. (Seriously, don’t laugh at me.) If you must do less, so be it; you’ll build up the number over time. Compare a purchase today with that nagging little dream in your head. Is the choice worth pushing that dream off or doing without it entirely?

There will always be a reason not to save, but do it anyway.