Report: ‘Clueless Generation’ Urgently Needs These 5 Money Lessons

Photo (cc) by mslgroup1

Millennials are saving money for emergencies but could use more lessons in how to plan for their long-range needs, financial advisers say.

Many who continue to rely on the bank of mom and dad need to learn to stand on their own now that they are adults, buying homes and starting families, advisers warn.

Born in the early 1980s through the late 1990s, they are “almost a clueless generation in so many ways,” John Spooner, managing director at Morgan Stanley Wealth Management, recently told CNBC.

Most millennials are good savers when it comes to the short term, but in the wake of the recession, they aren’t really saving for the long term, says a Bank of America study.

Here are five key money lessons for millennials.

1. Offer incentives

Parents may not have created an adequate sense of ownership around money when their children were young, and they need to start, Shannon Ryan, a certified financial planner and founder of TheHeavyPurse.com, told PBS’ Next Avenue. Incentivize your child by offering a savings match — like an employer’s 401(k) match — upon reaching a specific goal or milestone. Help your son or daughter outline these goals, like buying a car or saving for a down payment, along with the steps needed to reach these objectives.

2. Set a limit on aid

Treat financial support like an allowance and cut it off at a certain point, Jeff Rose, a certified financial planner and founder of GoodFinancialCents.com, told Next Avenue. Work with your son or daughter to devise a budget by reviewing essential living expenses and debts.

3. Invest in a personal brand

Many millennials watched parents or other relatives receive pink slips after decades of loyalty to one company, says TaxAct.com. They are embracing side hustles — earning money from the sharing economy, selling jewelry, creating a tutoring business or freelancing on the weekends — and building their personal brand through blogs, networking events, social media and more.

4. Start saving early

Remind millennials that money saved compounds over time. If you save $250 a month for 40 years, and it grows at 6 percent annually, you’ll have almost $500,000, but to get to the same amount when you start saving at age 40, you’ll have to put away $1,000 a month, TIAA-CREF financial consultant John Nauss recently told US News and World Report.

5. Charge rent

Up to 1 in 3 millennials live at home, research suggests. Parents could charge their kids rent and stow the money away in a high-yield, online savings account, Next Avenue says. When your kid is ready to move out, you can provide him or her with cash toward buying a home or paying for grad school.

How do you help your millennial? Share with us in comments below on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
4 Ways the Social Security System Will Change in 2020
4 Ways the Social Security System Will Change in 2020

These adjustments will impact both workers and retirees in the new year.

Should You Hire a Service to Negotiate Your Cable and Other Bills?
Should You Hire a Service to Negotiate Your Cable and Other Bills?

Services like BillCutterz and BillFixers will negotiate your cable, internet, phone and other monthly bills in exchange for a share of the savings. I tried it: Here’s what happened.

14 Things We Buy and Then Almost Never Use
14 Things We Buy and Then Almost Never Use

Save your money. These items seem alluring but they often end up as coat racks and dust magnets.

7 Reasons Workers Age 65 and Older Have Not Retired Yet
7 Reasons Workers Age 65 and Older Have Not Retired Yet

For some, the golden years are a time to increase the gold — but their reasons for delaying retirement vary widely.

7 Tricks to Cleaning Your Bathroom in Minutes
7 Tricks to Cleaning Your Bathroom in Minutes

These tips can get your bathroom sparkling with little time and no elbow grease.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.