Millennial Banking: Sharing Lessons We Boomers Have Learned
They say that we Baby Boomers have spoiled the Millennials. That Millennials are not equipped to deal with today’s economy. That Baby Boomers have not set a good example with all our debt and lack of savings. If we Boomers have learned nothing else during the recession, we should be saving aggressively for our rainy days, our retirement, and purchases.
I am passing this wisdom along to my 22 year old Millennial son.
The economy has been so bad that many Millennials can’t find jobs, and if they do find jobs, they are low-paying. While the outlook for Millennials is pretty negative, my son was fortunate to find a job that pays pretty well. I am attempting to teach him that the road to security for him and his future family is saving, using credit wisely and being very conservative with his spending.
It all starts with a spending plan and an understanding of various financial mechanisms he will need to use.
We estimated all his future bills and set that amount as his savings budget. Since Millennials are living with their parents longer than any other generation, I am encouraging him to save as if he has an apartment, a car loan, utility bills, and grocery bills. This training/discipline will enable him to go out on his own sooner.
Upon graduating from school, he received various credit card offers. We picked one from our local bank, a bank I patronize, passing the brand loyalty down from parents to child. He will establish his credit by making purchases that he already has the funds to pay for. He has the option to pay off the balance on the due date or over time. We hope to see his credit score increase and additional credit extended to him.
At our bank, my husband and I set up a checking and a savings account for him while he was in high school. He needed his checking account and routing number to set up direct deposit at work. Since he had no bills, we never ordered checks, so this information was not readily available. Interestingly enough, my son asked why he needed checks. In the age of online banking, I understand why he is asking this question: I personally use checks so infrequently, I hardly ever run out of them! Nevertheless, certain establishments still require payment via checks, where debit and/or credit cards are not accepted. And, once his direct deposit is set up for his paycheck (we had a little hang up getting it set up without having his checking information), we can set up the direct transfers for automated savings.
Overall, we are moving in the right direction and on the road to financial security…or at least one step closer to him moving out of Mom and Dad’s house!
Stay tuned to see how life can happen.
A Boomer Parent, soon to be an Empty-nester