I readvit somewhere and I decided to share with you guys.
With the holidays fast approaching, December, like the decade’s old Zombies lyrics, really is the “time of the season when love runs high.” It’s the time of year when scores of empty nest Baby Boomers invite their 20-something and 30-something chickadees back for a bit of R&R, a home cooked meal, and perhaps a side order of financial advice.
Actually, make that the main course.
That’s because by at least the financial success yardstick, too many of our children are failing to measure up. Like father, like son, and like mother, like daughter, our Millennial children aren’t saving enough money. In fact, a recent Moody’s Analytics study found that for Americans under 35, their savings rate stands at a paltry (not poultry) negative 2 percent. Of course, like a Carter-esque “Crisis of Confidence” speech, it could always be worse: in 2007 Millennials were living a whopping 15 percent beyond their means, or in economic parlance, had a substantial “negative savings rate.”
What’s so bad about not saving for tomorrow? The fact that nearly 22 million adult children (36 percent of adults 18-31) are living with their parents. I’m betting that’s a multi-generational record not seen since the turn of the 20th century when a still largely agrarian US economy relied on the “old”as well as the young to keep the family farm going. As if underscoring the point, CNN recently ran an essay from 27-year-old Jillian Knowles, a physician assistant, who writes at length about her pride at still living at home with her parents.
Don’t get me wrong. There’s nothing inherently wrong with placing the empty nest on hold. With college debt at record levels and young adult unemployment still lagging in the national economic picture, these are without doubt difficult times. But it’s vital that whether our adult children live at home or are struggling to make ends meet in their first or second apartments, we help our children thrive and soar. The most important way we can do this is by helping them achieve financial independence first. Here’s how:
Tip #1: Reopen the Empty Nest Temporarily — One of the easiest ways to help Millennials save money is by offering them discounted room and board. While it’s important to set parameters for length of stay and the percent of household bills contribution, letting adult children live home for several months (or more) can help them find their financial footing by paying down college debt, building credit via car payments, and begin putting money away in savings accounts or investing in stocks and municipal bonds.
Tip #2: Encourage Retirement Saving Now — Just because millions of Baby Boomers drank the Kool-Aid and believed in their perpetual youth, doesn’t mean we can’t teach our children better. Encouragingly, a recent study finds that an impressive 70 percent of employed Millennials began saving for retirement at 22, or the same age many graduated from college. If your 20-something hasn’t mentioned their company’s 401(k) plan, now would be a good time to speak up.
Tip#3: Tech to the Rescue — Considering that 86 percent of Millennials own a smartphone (and 90 percent say their trusty gadget is stuck to them like flubber on the soles of a pair of PF Flyers sneakers) it’s natural this would be one of my bullets. Increasingly there is a growing list of iOS and Android apps designed to help Millennials track how they spend their money. Level Money is one app in particular that’s earned plenty of positive press. But traditional banks are getting in on the mobile money management act too, adding such features to their more traditional smartphone interface. Beyond paying bills and showing checking and savings account balances, these apps offer creative ways to set money spending and saving goals.
The bottom line? This holiday season, as our homes again become filled with the not-so-little pitter-patter of Millennials’ feet, let’s give our maturing children the collective gift of sound financial management tools and long-term saving skills.
After all, while a short term visit is embraced and a medium-term stay is more than acceptable, anything longer than that, and we will not have lived up to another piece of Zombies’ wisdom: “To show you (our children) what you need to live.”
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