It sucks to be you, millennials. A new study released this week by PNC Financial Services found that only a mere 18% of 20-29-year-olds feel confident about their preparedness for retirement–the rest are too busy relying on “two or more sources of income” just to get by: part-time jobs (57%), full-time jobs (28%), and–drum roll–the bank of mum and Dad (21%).
Soaring tuition and credit card debt are clearly to blame, but the PNC survey sheds light on another issue likely weighing on the respondents’ parents’ minds: Isn’t it time millennials got off the pot and started supporting themselves?
Laura Sharr-Bykowski, a certified financial planner with Ascend Financial Planning agrees, but says it isn’t that simple.
“These kids of baby boomers were told they could be all, do all, and have all,” she explained in an email. “They are finding out that they can’t find employment and their hours are being cut, and many do not have the benefits their parents enjoyed, like pensions.”
Toss in fear of the future and the sobering experience of living through a housing and stock bubble and watching your parents’ retirement nest egg all but catch fire, and it’s apparent that millenials have a lot of work to do before they can become financially independent, said Joe Templin, author of Financial Mistakes of New College Graduates, in a phone interview.
“Financial independence means that you balance your own checkbook, spend less than you earn and have a plan to be successful in the future,” he said. “I’m actually surprised that the PNC numbers are as positive as they are.”
Templin shared a few tips to help millenials take charge of their finances. Follow them if you want to open your bank of You:
- Pay off your debt. Seriously, just do it already. “Once you understand that you have to spend less than you earn and that most will go to taxes, allocate 25% of what you earn for saving and paying it off,” Templin advises.
- Draft a success plan. Along with paying off debt, think long and hard about what you want to get out of life. Remember, your spending habits today impacts your future, so budget for day-to-day and monthly expenses, and set money aside for bigger goals like buying a car.
- Enlist a career mentor. Your 9-5 is your biggest source of income. Start taking it seriously. “Having someone five to 10 years older than you will help,” Templin suggests, because he or she can provide guidance on the best investments (night classes, computer skills) and how to navigate the office culture.
- Get real. Living off mum and Dad is not a solid financial plan. They are not an unlimited resource. They cannot take out a loan. Their home equity’s dunzo. “Parents are knocking on the door to retirement themselves and you’re asking them to sacrifice their future,” Templin says. So the next time you overdraft your debit card, ask yourself: Is that $15 cocktail really worth frittering away their 40 years’ of hard work? We strongly doubt it.
Now here’s one for the parents: Having trouble talking to your teenage daughter about finance? Check out these expert tips.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.