Millennial’s undoubtedly face many challenges including dealing with student debt and trying to find an actual well-paying job post-college. Many of them have questions about what to do to ensure their financial security once they’ve entered the working world.
Sheila Bair, the senior advisor to the Pew Charitable trust, a best-selling author and the former FDIC Chair recently had a few words for millennial’s, advising them to, at minimum, be realistic. “They need to be flexible in this job market but work hard and do a good job in whatever that first position may be, and it will lead to better opportunities later on,” Bair said.
Bair also gave a few tips for young adults who wish to gain financial security once they’re out on their own
- The first is to take advantage of company benefits as much as possible. Bair said that most millennial’s start wondering about how to manage their money right after they get their first paycheck but, overwhelmed, many quickly put those thoughts on hold. But she advises is to start immediately participating (if it’s offered of course) in their company’s 401(k) retirement plan and take advantage of the employer match if they offer it. She said it’s the best way to start building a good retirement “nest egg” right away and the best way to take advantage of compound interest as well.
- Bair also advised that millennial’s enroll in direct deposit and automatic savings plans, as well as setting up direct deposit for their paychecks. Since most banks offer automatic savings plans, a set amount of money can be automatically allocated to a savings account when their check is deposited into their checking account. Bair said that, for millennial’s most of all, “out of sight is out of mind” when it comes to money.
- One last bit of advice was to watch out for costly fees and overdraft protection as well. She advises that millennial’s do more to “stay on top” of their accounts and ask as many questions about fees as possible. “Unfortunately, fees on both checking and savings accounts are not as transparent as they should be,” she said. And finally, stay away from overdraft protection. “It has tripped up far too many people. … Only spend what you have.”
So there you have it millennials. Sound advice from one of the best financial minds on the planet. Now you’re only task is to take that advice, use it and do your best to put it to work for your own finances .