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Today, millennials make up over a quarter of our nation’s population, and more than a third of the workforce. With numbers growing still, we are becoming the largest generation in U.S. history, but these aren’t the only numbers that set us apart.

Millennials face vastly different financial circumstances than those of their parents—with student loan debt increasing by 84% in the last decade and some cost of living indicators steadily rising, the financial burdens of our generation can seem overwhelming. So, what can we do now to set us up for success in the future? In this post, we will discuss these hurdles and offer helpful tips to tackle one of the most daunting aspects of daily life.

1. Set Priorities and Goals

When you get your first paycheck, it is easy to want to spend it all right away, but what are all the things you should be putting your money toward with these limited resources?


With finite funds, saving can seem like an unnecessary hindrance as a young, healthy person entering the workforce, but save as much as you can—and save now. Devoting your paycheck to the above four areas will set you up over the long-term to be able to pay attention to a long-term investment strategy, something you can read more about on our previous post on Using a Road Map to Reach Long-Term Investment Goals.

So why is saving early so important? This graph illustrates how compound interest can work in your favor over time:

Saving $100K Now vs. Saving Later

As you can see above, because of compounding interest, saving $100,000 now with no other additional contributions at 20 years old produces significantly better results than if you start saving even 5 years later at 25 (this is assuming a 5% rate of return).

Meeting your savings goals is important and takes time. Setting contribution benchmarks and working towards them gradually is more realistic and achievable. There are several strategies to help you save regularly and effectively:

  • Automatically direct a portion of your paycheck to your separate savings account. Studies show that if you don’t see the money it makes it a lot easier to save.
  • Allocate a certain percentage of every paycheck rather than a flat amount. That way, the contribution will go up when you get a salary increase.

Many apps and platforms exist to help you save even more frequently and in a smarter way. These apps can help you work towards your goals.

As far as your emergency fund goes, a good rule of thumb is to have 6 months of living expenses set aside. It is also a good idea to keep your emergency funds in money market accounts or no-penalty CDs so that you can earn interest while your funds are stored safely away. This is where the concept of liquidity (readily accessible cash) is important—depending on what you’re saving for, you may want to keep certain funds in a vehicle where you can access them quickly and without penalty.

2. Build & Monitor Budget

Creating and maintaining a budget is an essential part of financial health because it helps you set both limits and goals, stay on track with your savings, and monitor your expenses. To create a budget, we recommend focusing on the following:

  1. Calculate your monthly take home pay. If you have more than one source of income, or receive irregular pay (i.e. bonuses, commission, etc.), you should also take that into account.
  2. Once you have your top line monthly income figure, you should work on gathering a list of all your fixed expenses, or the costs that stay the same each month (i.e. Car insurance, rent, utilities, student loan payment, phone plan, and car payment).
  3. Next, estimate your monthly variable and discretionary expenses, or the expenses that vary month-to-month (i.e. groceries, eating out, gas, uber, entertainment, buying clothes, and buying coffee).
  4. Subtract your fixed and variable expenses from your take home pay. This will give you a good idea of how much you have left at the end of the month (or overspend).

To help you come up with the best estimate for the numbers above, we recommend going through your past credit card/debit card statements and totaling up each type of expense.

Creating a budget is great, but it doesn’t mean much if you don’t continue to monitor your expenses each month. This can help you pinpoint areas in need of improvement as well as locating ways to save more. For example, taking public transportation in lieu of calling an Uber, or making sure you are diligent about buying groceries instead of eating out frequently.

To guide you through this process, there are lots of budgeting platforms and tools out there, many of which are free and easy to use. You can also create your own spreadsheet in excel. Budgeting helps you become more cost-conscious and leads to finding more creative ways to save.

3. Master Debt & Credit Management

More than half of millennials have substantial student loans to pay off, and many  have mortgages. Since debt is a common aspect of millennials’ financial lives, sound cash flow management becomes even more imperative. When considering whether to use your money to pay off debt or invest, it is important to consider the cost of debt and current market environment:

Invest or Pay Down Debt?

To best explain the graphic above, if you decided to pay off $100k in loans 10 years early, you would save $24k in interest that you would have had to pay over the remaining life of the loan. If you decided to maintain that loan balance and invest the extra $100k, in this example you would earn $40k on those investments over the 10-year period while still maintaining the debt.

The concept of opportunity cost comes into play here—you can put your money towards lots of different goals, but you need to understand that money put towards one goal has a cost of not being applied elsewhere. So, what does this mean for cash flow? Like the example above, if your student loan rate is 7% but your mortgage is 3%, you should prioritize payments on the student loans.


Developing strong financial skills as a millennial can set off a chain reaction. If you have strong budgeting skills, you immediately empower yourself to be in control of your financial environment versus being reactive and potentially falling into large revolving debt payments. Taking this disciplined approach will eventually lead to establishing strong credit and ultimately receiving better interest rates on future loans, i.e. buying a home. With lower interest rates, you can pay down debt faster and have more money to set aside for investments. Finally, the earlier you begin to put money away in savings and investments, the more growth potential lies ahead. All in all, the aforementioned principles of money management should make for a bright future built upon knowledge, healthy financial habits, and confidence in your ability to be the steward of your own wealth.


For further reading we recommend “The Millionaire Next Door,” which points out that the truly wealthy are not the ones who live lavish lifestyles, but the ones who live right next door, drive used cars, and save and invest their wealth.



Wealthspire Advisors LLC is a registered investment adviser and subsidiary company of NFP Corp.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, Certified Financial Planner, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Wealthspire Advisors cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. © 2021 Wealthspire Advisors

Emily Platt, CFP®

Emily is a member of the investment team and works in our Potomac, Maryland office.

Karl Stiegmann, CFP®

Karl is an advisor associate in our Potomac, Maryland office.

Emily Kurisky

Emily is a senior marketing & communications associate in our Potomac, Maryland office.