Financial Hacks for Millennials

At 80 million strong, millennials are the largest age group in American history.1 And they are facing a world of great financial uncertainty and opportunity.

This article kicks off a 12-part series on millennials’ unique financial challenges and creative ways to solve them. We’re focusing first on student debt, since it is a leading source of stress for many young adults.

More educated than previous generations, one-third of millennials have at least a college degree2 and the average student loan debt for a 2016 graduate was just over $37,000.3 That figure is important. Gallup research found that when a student’s debt load reached $25,000, they began to see it less as an “acceptable investment” and more as a “source of existential dread.”4 That deep level of stress can rob young adults of the joy and excitement they should have starting out in life.

Here are some financial hacks that can help millennials get out from under student debt.

Hit up your employer. Student loan repayment assistance is becoming a workplace perk. More and more employers see it as a way to build loyalty and increase the morale and productivity of young talent.

Refinance to reduce. Student loan refinancing may help you lower your interest rate, gain better repayment terms and consolidate your monthly payment. But proceed with caution, says James Matthews, managing director of Blueprint, a financial service firm that helps young professionals: "The interest rates may be attractive when refinancing federal student loans through private student loan companies but you can risk losing certain protections around loan discharge due to death or disability. You may also lose access to certain income-driven repayment options or potential loan forgiveness programs."

Move to Niagara Falls. Or Detroit. Or Chattanooga. To attract younger talent, some U.S. cities are putting money on the line. The Rural Opportunity Zones program in Kansas, for example, is luring college graduates to smaller communities with the promise of up to $15,000 in student loan repayments.5

Show yourself tough love. Many millennials climb out of debt through strict budgeting. Cutting out expensive extras, getting a roommate, shopping for clothes at thrift stores (or not shopping at all), selling your car are all ways cut back on expenses and pay back your loans sooner.

Save painlessly. See if your employer can channel part of your paycheck into a “loan payback” account. The money is out of sight, out of mind—until you’re ready to pay off a chunk of your debt. And keep saving for your future as well, says James. “Make debt repayment a priority but also be sure to set aside money for changing life needs, such as buying a home, having children, and retiring.”

Pick up a part-time gig. Millennials are hard workers. Almost three-quarters work more than 40 hours a week, and 26 percent have more than one job.6 Side-job opportunities in the “gig economy” are on the rise, from Uber-driving to Task Rabbiting.

Research tells us that working Americans who are most confident, financially and emotionally, put a high priority on living within their means, sticking with a plan and deferring gratification. It’s a recipe for success for those who want to pull themselves out of student debt, as well.

  1. http://time.com/247/millennials-the-me-me-me-generation/
  2. https://www.theodysseyonline.com/11-positive-facts-millennials?altdesign=socialux
  3. https://www.makelemonade.co/top-reads/refinancing-student-loans-5-things
  4. https://www.forbes.com/sites/sarahlandrum/2017/10/20/the-impact-of-student-loan-debt-on-millennial-happiness/#1d4bf6fe7125>
  5. https://kansascommerce.gov/320/Rural-Opportunity-Zones
  6. http://www.manpowergroup.com/wps/wcm/connect/660ebf65-144c-489e-975c-9f838294c237/MillennialsPaper1_2020Vision_lo.pdf?MOD=AJPERES

Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY

2018-53648 Exp. 01/2020

James Matthews is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 4201 Congress St., Suite 295, Charlotte, NC 28209. (704) 552-8507. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. BluePrint Holdings is not an affiliate or subsidiary of PAS or Guardian.

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