The stereotypes are everywhere: Millennials are entitled and lazy. They’re bad with money. They’re putting off adulthood longer and longer.
Erin Lowry, a writer and personal finance expert who calls herself The Broke Millennial, finally had enough.
“We get slammed in the media all the time,” she says. “We’re not getting married. We’re not buying a house.”
Here’s what she says the news doesn’t report: Many Millennials—mixed up about money as they may be—will bravely admit what they don’t know and seek out the info they need.
This need to explain her generation inspired her blog, and, as of this past May, her book, both of which have the title Broke Millennial. The purpose? To address worries and hang-ups with simple, relatable advice.
“It’s great when people feel comfortable enough to say ‘I don’t understand. Back up,’” says Lowry.
She knows of what she speaks. Lowry socked away $10K during college before moving to New York City in 2011 and has since more than quadrupled her $23K starting salary.
We talked with her about what her devoted follower are really asking about, and why the many tips from well-intentioned elders may be missing the mark.
Admitting What We Don’t Know
Here’s the thing. Many of Lowry’s followers have cleared the initial hurdles on track to financial freedom. They just need help with next steps.
“All consumer debt is paid down or they are seven years into their student loans,” she says. The next questions, she says, are often about investing: “How do I get started? What do I do next?”
Some people don’t realize that by putting money into a work-provided retirement account, they’re likely already investing.
Others are held back by a too-narrow definition: “You hear about investing in the stock market, or you turn on Jim Cramer, and you think, ‘What is he yelling about?’ and you think, ‘Oh, it’s gambling,’” she says. “But it’s not about individual stock picking.”
It’s important to find voices you can relate to.
Recently a woman wrote to her and said, “I can’t find resources where i’m not either being mansplained to or belittled.”
Taking Our Parents Advice—And Leaving It
Lowry often cautions people to question relatives’ money advice—no matter how well-intentioned. “I always say, ‘I don’t know your parents, but as a baseline reaction, let’s double-check whatever anyone tells you,’” she says.
Dysfunctional relationships with money are often passed down, she says. So go online to pressure test Mom and Dad’s advice, she says. Lowry’s favorite place to research?
“Reddit is a treasure trove,” she says of the self-moderating threads.
Whether you like blogs or podcasts, Lowry suggests diversifying. She suggests finding a few, and balancing a range of opinions as you read or listen. “You can have something on the general saving and frugal side,” she says,
Looking for a place start. Lowry is intrigued by those who focus on the concept of FIRE (that’s financial independence retire early).
Reconsidering the Dream of Homeownership
Whether it’s Mom and Dad, the media, or both, many Millennials feel bad about renting,
“It’s this rhetoric that we’ve been fed since we were kids: Buying a house is what you’re supposed to do,” Lowry says. “We’ve also been so force-fed this message that renting is a waste of money.”
But she vehemently disagrees. “I say: Does this actually make sense for you?”
In some markets, including Lowry’s NYC hometown, the “astronomical” cost of a buying a home is a non-starter; even if a down payment and the mortgage payments are doable, there still needs to be a significant cushion so that, when the ceiling caves in late one night—as Lowry’s did—the owner has the funds to repair it.
“To me, renting is very beneficial,” she says. “I got to outsource all of that pain and all of those costs.”
Accepting that Money IS Emotional
“We’re not rational consumers all the time,” says Lowry. In other words, there is no one “right” way to invest an unexpected windfall such as an inheritance. It all depends, she says, on your level of risk tolerance: “If you are really risk-averse when it comes to investing in the stock market, then don’t check your portfolio more than once or twice a year,” she says.
Taking the long view, she says, “We’re far enough out from 2008 and are having short term memory loss about it. Another recession will come—that’s how it works—so if we get into one in a few years, you can’t panic.”
Likewise, she says, if you’re set on buying a home, be sure you’re doing it for the right reasons. Ask yourself: How long are you staying in the area? (It’s probably worth questioning the decision if it’s less than 5 to 7 years, she says.)
And how comfortable are you being house poor? You might qualify for the mortgage, she says, but, as is the case with most sound investments, “You need more padding if you want to jump.”
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