What Can We Learn from Millennials about Wealth Planning?

MP900399669Baby Boomers need to adjust how they think, especially about the thought of slacker Millennials living with their parents, depleting the fridge and glomming off others. When it comes to managing their financial lives, those in the generation born between 1982 and 2000—about 83 million Americans—are making smart, somewhat surprising choices.

Maybe we can all learn something from today's 20- and young 30-somethings.

AARP's article, "What Millennials Know About Money and Work," tells us that about 40% of millennials bumped up their 401(k) contributions in the past year. That's about twice the percentage as that of boomers, according to research from T. Rowe Price.

In addition, more millennials know how to stick to a budget.

About two thirds of 18- to 29-year-olds don't have even one credit card, research from Bankrate.com showed. Compare that with about one-third of those who are age 30 or older.

There are really two reasons for this: (1) millennials entered the credit space when the market was really tight and debiting was the only option available to them; and (2) they realize credit is a really fast way to get in trouble with debt.

Are you overusing your credit cards? In other words, is your credit card balance going up every month, or do you use one card to pay off another? If yes, look to the millennials for some guidance and remove them from your wallet.

Reference: AARP (December 2015/January 2016) "What Millennials Know About Money and Work"

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