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Many studies have been conducted on this subject. Many comparisons have been made with the generation x’s, and a lot of predictions done about the future of millennials finances. One general feeling and urge to save is to have a comfortable retirement plan. Be it you are employed with a company that has a retirement plan package for employees, or you are a public servant and remit towards social security. You are still expected to stash away some percentage of your income in future anticipation. Surveys have revealed that the number of millennials without a penny on their accounts has sharply increased, the figures to support these are 31% in 2018 and 46% this year. However, the majority of this population was aged between 18-24 years.
Why not save?
Several reasons have come while trying to understand the dynamics of savings and the margins witnessed during these two study periods. Some are discussed below.
Low stocks
The best way of keeping savings is by investing. This venture has, however, not been so forthcoming in the past couple of difficult periods witnessed by the recession struck economy.
Furthermore, most millennials with savings reported to have it cash, and this is particularly a very imprudent saving structure since inflation alone can destroy those dollars in less time than you may anticipate. Your thousands will ultimately fall in their purchasing power by the time you are of age to retire. If adding more stocks-however stressful and with less appreciation potential, is not an option, you will have to put away a big chunk of your income to ensure a comfortable retirement.
Nevertheless, many inventions are coming up every minute, which requires funding, providing an alternative way of saving. You should, however, consult widely on the feasibility of the venture you want to invest in. Some will sink with your cash with them.
Job uncertainty.
It has become increasingly difficult to secure employment in this robot and machine generation. The chances of you losing your job to a machine or a robot are very high nowadays that no one is entirely certain of the security they job they have when they wake up the next day. These technicalities make it difficult for millennials to settle into a career and make the necessary investments for their future. The little they save from the current job will likely be used up when they lose their job and are looking for another employment position.
School
One of the reasons which came out most conspicuously is the fact that many of the Millenials are still accomplishing their studies or have graduated and still settling their study loans. These situations explain why a majority of the unsaved population is between the ages of 18-24. It is thus understandable that a majority of the youth within this age bracket are unable to get gainful employment to open up their savings account or an investment line. With high student debts weighing down on their shoulders, so much less is expected of these young generations to make it corporate. However, recent studies show an average of 39% of all the population is unsaved, indicating that it is not all lost for the millennials as there is still time.
Difficult economic era
It is also argued that the reason why millennials have dismal saving statistics lies rooted in economic times. The analogy is that most of these people arrived at the times of the housing crisis and after that, there was a tremendous global economic regression. These factors make the market tough to enter and make meaningful gains that are worth saving.
In addition to this, due to a sticky job market, employers are not willing to pay more; they are eager to hire people from other nations to work online or in their stores to pay them much less than what you will be demanding in terms of wages. Such intensified competition does not make it easy for millennials to do well in the investment sector. That is why more people are resorting to payday loans and borrowing money.
Inaccessible retirement plans
A survey revealed that about 55% of millennials in employment positions do not qualify or do not have access to retirement plans. Of this percentage, 25% are in employment where the employer does not sponsor their retirement plans, and the remaining 30% are in temporary jobs or part-time employment opportunities which do not qualify them to be sponsored for the program. These figures are staggering, which leaves only 45% of the employed population able to access these plans. This has a significant bearing on the saving habits of millennials. Implying that they have to get alternative saving plans.
Bright line
As much as all saving statistics indicate a downward trajectory, there might be a few points that are being missed.
It could be possible that so much is not being saved because these millennials have confidence in the economy. Short-term savings may be encouraged by prospective dark economic times in the future. Low saving percentages may be an indicator that the economy is doing well, and the future is bright.
Also, it may indicate that most of the millennials are enjoying the economic times, such that they are taking in more responsibilities such as owning homes, starting families and starting businesses so that most of their earnings is spent on these ventures other than on savings.
The Bottom Line
In view of the arguments presented in this article, it is apparent that many millennials do not have a concrete savings plan for their retirement, which is, however, not a good trend. It is important to adapt your method of stashing away a few bucks to your safe or saving account. You can consider having a cheque be deposited automatically into your account or have your bank set a cap on your monthly spending. Capping your spending will consequently leave behind a few coins to add to your savings account.
All the saving plans usually start with budgeting and planning. You should devise an excellent and manageable budget which will enable you to save without any problems. At the same time, you have to set some realizable targets. Precise and achievable short-term goals are better than long term ambiguous objectives, which generally don’t get realized.
