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The vast majority of millennials have a lot more on their minds than scoring a job and getting off mum and dad’s couch.As it stands, they’re toting around an average of $45,000 in debt that will only grow as they get older, according to new research by PNC Financial Services.
By the time they hit their 30s, today’s 20-somethings can expect to carry nearly $80,000 worth of debt along with them.
But here’s where they’re getting stuck: Should they worry about paying down all that debt now or saving for their future?
Nearly 100% of 2,000 respondents said they save on a regular basis but just 13 per cent said they’re putting away cash for retirement.
“20-somethings are challenged with a balancing act between saving for the future and paying down their debt,” said Shannon Johnson, director, consumer checking and rewards, PNC. “Though budgeting can seem overwhelming, Millennials have the luxury of time to develop a strategy and more resources than any other generation to better manage their money and achieve their financial goals.”
Here’s some advice to get you started:
Find a balance. The key is nailing a healthy balance between your nest egg and paying next month’s rent. If you haven’t saved at least three month’s worth of emergency savings (six would be best), then you’re in no position to tuck away funds into a 401(k).
Don’t putz around. Do whatever it takes to get your head above water, whether it’s adopting a no-spending rule for a week or even a month or something as simple as dedicating yourself to packing a lunch each day.
Know your numbers. The last thing you want to do? Stick your head in the ground and ignore that stack of bills piling up on the kitchen counter. Know your numbers, from your credit score down to the interest rate on your student loans, and take advantage of the bevy of financial tools on the Web. SmartyPig and Mint are a couple of great resources for budgeting and saving.
Remember–you will get old one day. Time is a luxury 20-somethings have in spades, but that doesn’t mean it’s an excuse not to start thinking in the long-term. Don’t expect your employer to give you a tutorial on your 401(k) or IRA options (Hint: Figure out what they are first). If they offer a matching 401(k), you’re basically throwing cash away by not contributing.
Take it from someone who knows: See how I nearly dragged myself into financial ruin after graduating from college >