Let’s Live Our Best Lives, Within Reason
BY ARISTON TELEO
Economy pitfalls carry long-term consequences, and ten years later, the millennial generation continues to feel the effects of America’s 2009 recession. This dip in our economy impacted the majority of us more than we could understand as teenagers at the time. Now, we have been plagued with Student Loans, lower starting salaries, and the consistent job-hopping method in pursuit of better compensation. Meanwhile we’re trying to “live our best lives” as we watch our friends and social media “friends” experiencing what look like fun travels and dining adventures, as if they’re actually making money. But just a few casual conversations will bring to light that more and more millennials are putting these experiences on credit cards and quietly stressing about the payments later.
Let's get real and take a look at some statistics on our generation’s personal finance issues.:
The average college graduate owes $35K in student loans, which equates to about $335/mo in payments based on the industry average of 6.8% interest and a 10-year repayment plan 1.
83% of those who have student loans say that their student loans have had a moderate or significant impact on their ability to meet other financial goals .
57% of millennial employees are stressed about their finances, with 48% naming financial matters as the top cause.
26% of millennials have unpaid medical bills.
These alarming statistics significantly hinder millennials’ abilities to “get ahead” in achieving lifestyle goals and building wealth.
Based on my own experience, I believe the financial literacy gap starts at the elementary school level. I know some of you may read this and think “What the hell? Who learns financial literacy in elementary school?” Some schools do though, and believe it or not, they are not just private schools. I went through a public school system growing up in Kansas City. I’ll never forget our 5th grade field trip. The teachers spent a couple weeks preparing us for the field trip as mock business owners. Each group had different roles in the company: President, Vice President, Marketing Leader, Reporting Leader, and Product Developer. We were 10 years old learning the basics of how a business is run and the different pillars of operations. Unfortunately, the majority of public schools don’t provide this opportunity to begin shaping young minds for fiscal responsibility and business acumen.
The final financial literacy gap reappears and cements itself into young wallets during college. I was a Business Finance major and one of our elective options was a “Personal Finance” class. Here as seniors, we were learning essentially what the true cost of living is. We analyzed salaries post taxes and benefits, then put together Excel spreadsheets to understand what our fixed costs (expenses that are the same on a consistent basis) and variable costs (expenses that may fluctuate in cost overtime) would be compared to our Net Income (the amount of money made after taxes and benefits are taken out of one’s income). Approximately only 150 students of the entire 5,000 in the senior class were taking this course; roughly 3% of graduates from my school were educated on this topic.
Let that sink in.
How do we solve this problem? First things first, get comfortable talking about it amongst those who are close to you. You know when you read the headlines and someone is accused of wronging a person, then others people find the strength to come forward and speak up as well? These conversations will have the same effect. I’ve done this myself when talking about financial goals among friends. Once I open up, they are more likely to share what their goals are and may ask for advice on how to achieve them.
The biggest mistake millennials make is saving after they are done spending in the month. Unfortunately, depending on how much debt they have, student loan and personal debt causes major detriment to savings, as seen in the statistics in the previous paragraphs. At the end of the day, universities need to do a better job at providing personal finance courses to rising graduates. This not only allows for better financial responsibility, but they also will likely reward the university later with donations as an alum.
If you’re ready to take control of your finances, first thing I recommend is to understand how much money you make monthly after taxes and fixed costs. Organize this data in Microsoft Excel or Google Sheets, where there are templates for budgets of all kinds. If you don’t want to pull this up on your computer, then you can also find financial management applications on your smartphone, or check your banking apps routinely if your phone has limited memory. Some of the major banks have options in the app for budgeting. Get out there and take control of your finances, your peace of mind, and continue to live your best life…without going into debt.
Meet the Writer
Ariston Teleo is from the Kansas City, KS area and an alum of North Carolina A&T State University. He currently works in Risk Management in the financial services industry. He is also an author, most recently releasing the book “She Can’t Handle the Truth... But It’s All I Can Give,” now available on Amazon. He enjoys traveling and trying new restaurants, and he is an automobile enthusiast.
