With such an abundance of information available at our fingertips, it is more important than ever for millennials to properly understand the world of savings, finance, superannuation and insurance to ensure financial wellbeing in the future.
Why does it seem older generations have a better handle on these concepts? Maybe things were simpler back then? Or was experience acquired through trial and error? As a millennial, wouldn’t you like to gain the experience without the costly errors?
With an increasing number of Australians looking to financial advisors for advice amid economic concerns, the notion that financial advice is only relevant for the wealthy or retirees needs to be dispelled. We know many young Australians are not actively seeking guidance advice on their financial affairs.
Millennials as defined by Investopedia are born between 1982 and 2004. They are technologically savvy, well-educated and interested in health, social, economic and environmental issues. They are also more entrepreneurial, driven by a strong desire to create their own luck and opportunities in the workforce.
However, while some Millennials may be ahead of the game and starting to invest in their future early, there are a number of reasons why many may not seek financial advice:
Getting lost in details: The majority of freely available information on these topics is often complicated, confusing or contradictory. It can be difficult to work out how much you need to save now and in the future to avoid getting caught out by rising costs and inflation.
Procrastination: Millennials may not have the right guidance, time or desire to actively plan and manage certain financial aspects of their life. If they don’t receive any help to get started, it can take years between thinking about getting advice and actually doing it.
Giving up: Even the simplest financial concepts can be hard to keep on top of for a long time. Also, there are many distractions in life that can jump in the way of attending to your financial needs. It’s important they remain committed to staying on top of opportunities to grow their wealth, like managing their assets in a self-managed super fund.
Seeking perfection: Trying too hard to achieve the perfect financial outcome can be counterproductive, time consuming and challenging. Achieving financial goals is not an exact science but through seeking advice you are already on the path to working out the best wealth strategies to accumulate your nest egg over time.
While there are plenty of hurdles in front of Millennials, here are some reasons they should consider taking control of their financial destiny now.
The benefits of starting early: If you’re young, have less commitments and more flexibility, don’t waste time in procrastinating. Learn good money habits early which you give you more options later on in life.
Take advantage of being young and healthy: Personal insurance premiums are cheaper for young and healthy individuals. The longer you wait to seek advice in this area, the less options you will have to protect against potential health issues in the future. Don’t forget that your biggest asset is your ability to produce income, so it needs to be safeguarded.
Seek guidance: You may benefit from an objective, third-party perspective on what are often emotional and difficult decisions and gain comfort in knowing sometimes it won’t always go to plan. Take small steps – patience and discipline play a huge role and requires regular encouragement and reward.
What can a professional financial advisor do for me?
To help you pursue your best interests and challenge you to achieve your goals, a professional financial advisor will help you to:
- Set realistic financial and personal goals
- Assess your current financial health by examining your assets, liabilities, income, insurance, taxes, investments and estate plan
- Develop a realistic, comprehensive plan to meet your financial goals by addressing financial weaknesses and building on financial strengths
- Put your plan into action and monitor its progress
- Stay on track to meet changing goals, personal circumstances, stages of your life, products and markets and tax laws.