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Planning for the Future – Guest Interview Re: New Millennial Research

May 23, 2011

For the next few weeks I will posting a question and answer format with experts in different fields to dive deeper into the results of my research.  We will discuss movement in the market, social entrepreneurship, high cost of education and more. 

For our first “Expert Conversation Series” we are talking with Shay Prosser.  Shay is the co-founder and lead trainer of Get It Together Today. Get It Together Today is a leader in independent financial and legal education. They offer workshops, trainings and mentoring to help all of us manage the business of life. Shay’s new book, authored with her business partner Hallie Hawkins, is now available at www.nowgetittogether.com.  The book is titled Get It Together: The Real-World Money Guide for Graduates.

Q: Our research shows only 41% of the Millennials make saving for retirement a priority? How does this strike you – better than you have seen in recent years or worse?

A: Your research seems to be in line with what I would expect, and frankly it is probably a greater percentage than the % of people in the average population that made saving a priority before the recession. The Millenials are seeing what is happening to older workers and have experienced layoffs firsthand, and as you state in your research, they have found out that it is not pretty. I think in recent years they have become even more aware of the need to take care of yourself and save for a both a rainy day and for the inevitable, getting older. Of course I would love to see an even higher number think saving for retirement, but given their current age and how far away retirement can seem 41% is pretty good. What is also encouraging is that they are looking more closely at benefits that companies offer. For many companies benefits are a place they can be competitive, and retirement is often a centerpiece of those benefits. By simply taking advantage of the opportunity to save some, hopefully with an employer match, a Millennial can get well on their way to financial security.

Q: Can you provide a few tips on how to prepare for retirement for those in their 20s?

A: The best tip I can give about preparing for not only retirement, but your financial life, is to educate yourself. Students are taught algebra and foreign languages in schools, but very often are not taught basic financial skills. Dealing with your own financial life is something everyone has to do throughout their life. So start out right by understanding the basics. Once they understand the basics they are in a far better place to make good financial decisions. From what we have seen with our older clients, many downfalls have been from simply not understanding what they were doing, the options or the possible consequences. Here are a few tips to get started:

1. Manage your credit, don’t take it for granted – build a good credit rating by understanding what good credit is and how to maintain it.

2. The why is just as important as the how much – know why you are making a decision, and what it will give you both tangibly and intangibly. Then make the decision. Your research on higher education is a great example of this – if you are going to go back to school, or attend a pricier school, calculate how much more you will make and compare that to the student loans or savings you will need to spend to get there. And ask yourself, is it worth it?

3. Make choices – sounds simple, but it is important. Decide what you want and make a plan to get there. And make retirement part of your plan. Financial security is something that will help you weather the next downturn, and allow you the opportunity to direct your own life.

4. Start saving now – no matter how little it may seem that you can save now, it can make a big difference. The longer your money has to grow, the more money you will have when you need it.

Q: What advice do you have for graduates struggling with paying back loans and balancing saving for retirement.

A: I would say, do three things at once – save for the short term, save for retirement, and pay off your loans. No one thing is more important than the other. You can pay down your debt and save for both the long and short term all at once. The best way to do this is to separate your money into “buckets” and create a goal and a monthly contribution amount for each bucket. Think in percentage of your income rather than dollars. For instance, if you are making $40,000 and can put away 20% toward debt and savings (which is ideal) you have about $7000 (after taxes) to put away. If you pay $250 toward student loans each month you will have $4000 to put toward short and long term savings, which I would split evenly until you have 6-9 months of living expenses in your short term saving.

And of course there is more on all of this in our book Get It Together: The Real-World Money Guide for Graduates. Check it out on www.nowgetittogether.com

Thanks Shay for taking the time to comment on our research and provide practical advice for Millennials navigating the world of work and life!

Up next for our blog – we talk to the CEO of a staffing, recruiting and consulting agency on the movement in the market. Look for that post by the end of this week. Remember you can download The Millennial Generation Today white paper from www.sbrconsult.com. Click on the research tab.

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