I am tired of reading articles like this: American millennials have an average net worth of $8,000 — and it’s part of a bigger financial problem the generation is facing.

The results of all of these studies are all about decisions that were choices someone made – not an emergency health crisis, or a loss of a job, but concrete choices to spend that money in that way. Many of the choices that are keeping millennials from saving for retirement are flexible expense choices. That means, if you are a millennial, you are in control of that money choice.

According to the Deloitte study, compared from 2007 to 2017, millennials are spending 16% more on housing, 26% more on food costs, 21% more on healthcare costs, and 65% more on education.

Many are flexible expenses…which means millennials “opted in” to the cost.

Changing your financial path

If at all possible, live at home and then share an apartment to reduce cost. Cook meals, bag your lunch – no home delivery for dinner – and limit meals out. Healthcare is harder to control – but a job with benefits helps. Education – as a millennial that debt is a sunk cost. So now you just need to service it as quickly as you can.

If you are lucky enough to be reading this as you are thinking about attending college, then you need to think long and hard about what you are willing to pay to get a degree. Community college for 2 years cuts higher education costs considerably. Work and save towards college during the high school years and work while at college. Work every summer and take classes in the summer at a community college that a 4-year college will accept  – and at a fraction of the cost to you. Graduate in 3 years instead of 4. Or 5.

Already have education debt – now what?

For those of you that are millennials reading this and thinking… “I already took on the education debt…now what?”, there is hope. First, do not take on any more education debt right away. Get a job that might help pay for that masters or PhD. Pay down your education debt AND participate in your 401(k), if you have one. Save enough to at least get the potential match that your company may be offering. That’s called saving. There – you did it – and you started a process that’s called compounding that will serve you well in retirement.

What about credit card debt?

According to a recent Merrill Lynch Wealth Management report, 81% of early-adult households carry a collective debt of nearly $2 trillion, including car loans and mortgages, but mainly student loans and credit card debt. Those who carry the latter have an average balance of $3,700, and more than half said they’re struggling to pay it off.

Okay – no car, no house – until you can afford it. That’s simple and clearly a flexible expense. Credit card balance? Nope – pay it off every month.  If you cannot pay it off in full due to some unforeseen circumstance – like a loss of a job or a health emergency – then pay it off as soon as possible. Credit card debt is a black hole.

Get more than one job. Something that you do until the debt gets paid off. I know, it’s a huge drag to work all day and then on the weekend. But many of us did it – and we survived. You will as well.  I promise you will feel better about your money situation when you have a plan and can see the debt dwindling.

Various debt and soaring living costs ultimately make it more difficult for American millennials to adequately save. More than half of millennials don’t have a retirement account, and more than half also have less than $5,000 in their savings accounts, according to an INSIDER and Morning Consult survey.

Yes.  Debt makes it harder to save, but not impossible to save. So, try not to go into debt.  But if you are in debt, use the suggestions above to create a plan to get out as fast as possible. At the same time, continue to make saving for your retirement a priority.

Then when you are 60, think of me. I’ll be smiling – and so will you, and we’ll both know why.

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Susan Beacham
Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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