By Chris Taylor
NEW YORK, April 25 Everyone has chuckled about
millennial generation stereotypes: slackers hanging out in their
parents' basements, playing video games and binge-watching
That creaky stereotype requires some revision. After all,
the generation's vanguard is now around 35 years old, buying
homes, raising kids and facing all the economic anxieties of
every other age group.
For those transitioning into their prime earning years, Erin
Lowry has a new money guidebook. A millennial herself at age 27,
the popular financial blogger is releasing "Broke Millennial:
Stop Scraping By and Get Your Financial Life Together."
She spoke with Reuters to talk about a few next-gen ideas
for money management.
Q: Do millennials face particular financial challenges that
are holding them back?
A: I think one big difference is that money is so digital
these days. People are rarely handing over cash. It almost makes
it feel less real, like it is Monopoly money or something.
Another difference is that student debt is so huge these
days that it actually makes people less careful about their
early financial decisions. You are already in a big hole, so
what is a little bit more? If you already have $80,000 in debt,
what does it matter if it becomes $100,000? That is very
Q: What concrete advice do you have for young people getting
their financial lives in order?
A: One tip is what I call a "no-budget budget." After you
get your cash flow under control, pay your bills, and put aside
at least 5-10 percent for savings every month, then allow
yourself some leeway. Whatever is left over at the end of the
month - I don't make myself stick to the exact same percentages
or categories every month - I spend it on whatever I want.
Q: What is the big financial challenge for the many
millennials who are freelancers or contractors?
A: That is a real differentiator for this generation because
quite a few of us are self-employed. As a result, they should
try to have more in emergency savings than is typical, aim for
6-9 months' worth of expenses.
Also, freelancers tend to undervalue themselves when it
comes to negotiations because they are afraid of not getting the
gig or because they don't know what to charge. My advice is to
not get desperate and charge rock-bottom rates.
I know one freelancer, and every time she comes up with a
potential fee in her head, she tacks on an additional 15
percent. You almost have to push yourself to ask for more.
Q: With previous generations, homeownership was often
assumed. Is that changing?
A: Maybe it is because I live in New York, but the idea of
homeownership feels difficult to me. You have to think about how
long you are going to be in an area, whether your job is going
to be moving around, what the additional costs of things like
repairs and property taxes will be.
Historically there has been a huge emphasis on
homeownership, but I don't think it is the only way to increase
net worth, and I don't think it is the right choice for
Q: As a popular blogger, is it difficult to share so much of
your personal story and put all your finances out there?
A: For me, it is pretty natural by this point. Where I tend
to get tripped up is in dealing with money and other people.
For instance, with my boyfriend, there has been a big
learning curve in talking about money and our future goals
together. The merging of finances can be a very emotional thing,
and I have to be careful not to overstep any boundaries. I can't
just say: "My way or the highway."
Q: Are millennials ready for what is perhaps the greatest
wealth transfer in history?
A: One thing that makes me nervous is how few financial
planners are courting their clients' children. For instance, my
parents have a wealth adviser whom I have never heard from.
I think it behooves them to reach out to the next
generation. That relationship shouldn't start when the parents
die; it should start much earlier.
(Editing by Beth Pinsker and Lisa Von Ahn)