Budgets and Money

Budget Planning For The Millennial Generation

Budget planning does not come easy to the millennial generation. If you or a person you know is struggling it's not too late to get your financial plan in order.

Financial Mistakes to Avoid

By making the right choices, the millennial generation (the generation born between the early 1980s and the early 2000s) can better shake off the effects of a slow-to-recover economy and set themselves up for financial success through better budget planning.

If you or a millennial that you know is struggling with budget planning, then it's not too late to get back on the straight and narrow by avoiding these three financial faux pas.

  1. Using credit cards incorrectly.

    According to a survey conducted by Bankrate.com, not only is this generation's usage of credit higher than that of other generations, they're using credit cards all wrong. For example, the survey indicated that only 40 percent of millennials pay their credit card balances in full each month (compared with 53 percent of the over-30 age group). To compound the situation, three percent admit to missing credit card payments.

    When used correctly, credit cards can help you establish and build your credit history. They can also be a good way to earn discounts and cash-back rewards. However, it's always best to use credit sparingly and try you pay your credit card purchases off at the end of every month.

  2. Not saving enough for retirement.

    Millennials aren't saving for retirement as they should. In fact, only 46 percent of respondents from Money Under 30's 2015 Millennial Money Survey contribute money to a retirement account such as a 401(k) or IRA, down from 49 percent in 2014.

    If you're lucky enough to have an employer-sponsored retirement savings plan, take advantage of it - especially if you have any type of matching or employer contribution. Yes, it means you'll be taking home a little less, but because your contributions are made with pre-taxed dollars, you're actually reducing your taxable income by deferring earnings and taxes until you're ready to make a withdrawal. If you want to see how your retirement contributions can affect your paycheck, try using an online calculator.

  3. Foregoing Life Insurance.

    Among those who don't own a policy, sixty-three percent of millennials in a 2014 survey cited that the main reason why they don't buy the life insurance they need is because it's too expensive.1 The reality is, life insurance is usually cheapest  for this particular age group.

    Whether you're single, or married with children, there's a need for life insurance at just about every one of your life stages. If you were to die today, who's going to pick up the tab for your final expenses, loans and other debts? And if you're married, do you both depend on each other's paychecks to make ends meet? The fact is, being a young and healthy adult, there will probably never be another time in your life where you'll be able to secure such affordable life insurance rates.

For more information on budget planning, visit the Protective Learning Center.


1.http://www.limra.com/Posts/PR/News_Releases/Millennials,_Younger_Americans_Continue
_to_Show_More_Anxiety_About_Common_Financial_Planning_Issues_than_Older_Generations.aspx

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

Budget Planning

Are you or a millennial you know struggling with budget planning? Here are three financial mistakes millennials make when budget planning for a more secure financial future. For more information, visit our learning center.

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