Nine Secret Weapons That Could Save Millennials’ Finances

The millennial generation is associated with a boatload of financial woe, including but not limited to student loans, jobs that don’t pay enough, and the threat of being replaced by robots.

Cheer up, folks. Yes, even those of you who’ve been un- or underemployed or have particularly heavy loan balances. All is not lost. Your generation has some serious advantages that could outweigh the doom and gloom.

Note: If you read yesterday’s piece, you’ll notice there is some overlap between the “liabilities” and “advantages” sides of the ledger. One person’s challenge could be another person’s asset.

1. Time

With an age range of 22 to 37, millennials still have time both to save for retirement and to develop better money skills. You’re not like those people in their mid- to late 50s who have huge mortgages and/or are seriously behind in saving for retirement.

Learn all you can about smart money habits (a great place to start is in The Simple Dollar archives). Get saving, too; thanks to the magic of compound interest, the best time to begin saving is in your 20s. The second-best time? Right now.

2. Education

Young workers are more likely than ever to have at least a bachelor’s degree: 40 percent do, according to the Pew Research Center.

While college educations often result in college debt, they have another and more salubrious effect: higher lifetime earnings. According to the U.S. Bureau of Labor Statistics, median weekly salary for those with a bachelor’s degree is $1,173; for those who have only high-school diplomas, it’s $712. That’s a difference of almost $24,000 each year.

A study from The College Board indicates that the average borrower will reach the break-even point on college loans in 12 years. That means that by age 34, someone who graduated at age 22 will have earned enough not only to pay back their debt but also to make up for having been out of the workforce during college. (The study assumes students graduated in four years and pay 4.3 percent interest for 10 years.)

In a perfect world, you’d earn enough grants and scholarships to pay for college, or have parents who put enough in an education fund to cover four years. But if you do have loans, keep your eye on the big picture: That sheepskin should help you earn more over the long haul.

3. The Sharing Economy

Why buy a power washer when you can borrow one, or maybe even get one for free? Social networking possibilities abound on sites like Nextdoor and the Freecycle Network, and on Buy Nothing Facebook pages. You could find someone who wants to get rid of a rocking chair, a table saw, a bin of Legos, or something else you need.

Pro tip: Be sure to give as well as ask. That’s what keeps the sharing economy robust.

4. Shared Housing

Some millennials aren’t as wedded to the idea of living alone. Quite a few are living with their parents. Others throw in with one or more roommates, or take advantage of sites like HubHaus or The Collective to find communal living situations.

This doesn’t just reduce rent and utility expenses, either. Millennials who live at home can help their parents with heavier chores, and possibly care for younger siblings or help with medically frail grandparents.

Those in multi-roommate situations get built-in socialization along with rent reduction, and the “we’re all in this together” mentality can lead to budget-boosters like shared meal prep and evenings devoted to games or binge-watching Netflix vs. spending a ton of money on entertainment.

5. The Gig Economy

Need a side hustle? So many freelance gigs are out there – and think beyond the traditional pizza delivery and weekend bartending gigs, or even beyond things like ride-sharing services.

Think about what you’re good at and look for opportunities at sites like,, and Or put it out in the universe – especially through your social networks – that you’re available to babysit (which can pay really well), build websites, detail cars, clean apartments, or whatever it is you’re good at doing.

The extra money can go toward building an emergency fund, saving for a financial goal (e.g., new car for cash or eventual down payment on a place of your own). It can also go toward retirement planning. Speaking of which…

6. Retirement Awareness

Once upon a time people had a much better chance of getting a pension and/or were pretty sure they’d get by on Social Security (and maybe living with one of their children).

Employer-funded pensions are as scarce as hens’ teeth these days. Social Security doesn’t always cover even the basic cost of living. As for living with your kids, well, they might be unable (or unwilling) to host you.

Sounds glum – but on the bright side, millennials know now that they must save for retirement. No false hopes there that somehow everything will magically all work out.

That doesn’t make saving easier, mind you. But at least millennials are going into this with their eyes open.

7. Delayed Marriage

Marry in haste, repent in leisure. Divorce is expensive and also emotionally draining.

Millennials aren’t rushing into things: 57 percent of this cohort have never been married. By contrast, only 17 percent of their grandparents (aka “the Silent Generation”) remained unmarried at this age.

It’s not that millennials don’t believe in love. They do. About two-thirds want to get married some day. Here are the most-cited reasons they’re not betrothed yet: not financially ready (29 percent), not ready to settle down (26 percent), and haven’t found the right person (also 26 percent).

About that last: The longer you take to get to know a potential mate, the better your chances at finding the right partner. Don’t rush things.

8. Delayed Parenthood

Sure, we’re super-fertile in our early 20s. But waiting a few years can help position you and/or a spouse for optimal health insurance and parental leave.

That half-time fry cook gig at the mom-and-pop diner got you through the lean times when you couldn’t find a job right out of college. But suppose you’d started a family right out of college. Businesses with fewer than 50 employees aren’t required to provide maternity leave.

And even if the diner owners (or the gas station owners, or the pizzeria owners, or whoever employed 22-year-old you) could afford to give maternity leave, would you have been able to survive without working?

Being situated in a decently paid job with better benefits makes pregnancy or adoption a lot less stressful. And having five or six (or 10) years of working life before you become a parent could make it easier to step back into the career should you decide to take some time off.

9. Delayed Homebuying

Not everyone is cut out to be a homeowner at a very young age. Rushing to buy a house, townhome, or condo without thinking it through is a terrible idea.

You might be able to afford it right now, but present performance is no indicator of future results. If you buy in your early 20s you’re likely to be doing so on a wing and a prayer, i.e., it will take most of your salary just to cover expenses. You won’t have much of an emergency fund, and one change in circumstances – layoff, illness, parenthood, tree roots in the sewer line – could wipe out anything you do have.

Of course, you could luck out and have everything go right. Just don’t count on it.

In addition, buying too early means you’re now landlocked. Taking an opportunity elsewhere becomes problematic: If you can’t sell or rent your place, how will you set yourself up in the new city?

Finally, not everyone wants to be a homeowner. It’s really OK to admit it, despite the pressure from those who tout “the American Dream” as something everyone should want. And you might indeed want it – just not until later. Do what’s right for you; don’t let other people decide your future.

Award-winning journalist and veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.” 

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Donna Freedman

Contributor for The Simple Dollar

Award-winning journalist and veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.” A former full-time reporter for the Chicago Tribune and Anchorage Daily News and longtime columnist for MSN Money, Freedman has also written for Get Rich Slowly, Money Talks News, and other publications