The survey by American Express discovered that many millennials and Gen Z individuals are focusing on money goals for their 2024 resolutions. Out of over 1,800 people born between 1981 and 2012, 57% said their main goal for the coming year is related to personal finance. Following closely are wellness goals, with 50%, and mental health goals, with 48%.
Sue Gardiner, a certified financial planner and owner of South County Wealth Planning, explains that your mental health is significantly influenced by your financial well-being. She emphasizes that being financially strong doesn’t necessarily mean having everything for your current lifestyle but rather understanding how you spend money and knowing your personal cash flow.
Young adults from the millennial and Gen Z generations are outlining specific plans for their money in the coming year. Let’s explore the top three financial goals for these two groups and discuss how to begin working towards them.
1. Grow Savings
In 2024, the primary financial aim for millennials and Gen Zers is to increase their savings, with almost 60% of participants prioritizing this in their resolution lists.
To kick off the process, Gardiner suggests setting up automatic transfers of a specific amount into your savings account at regular intervals.
The choice of the account can also impact your savings. Gardiner advises, “The most common suggestion from advisors, and one I endorse, is to begin with a high-yield savings account and understand its functionality. Currently, with the interest rates it offers, a high-yield savings account can be an excellent and secure option for growing your savings.”
2. Pay Off Debt
Over 40% of surveyed millennials and Gen Z individuals identified clearing their debts as a major financial objective for the upcoming year. This is understandable, considering the challenges of paying off high-interest debt, especially since the Federal Reserve started raising rates in 2022.
Various strategies exist for debt repayment, depending on your situation. One approach is transferring your debt to a balance transfer credit card. These cards provide an initial period, usually up to 21 months, with a 0% interest rate. This allows users to make progress on their debt without accumulating extra interest.
“If someone has a strong credit score and has been consistently reducing their debt, transferring that debt to a 0% interest balance transfer credit card can be a beneficial strategy to redirect payments towards the principal amount owed,” suggests Gardiner.
Following this, Gardiner advises establishing a practical schedule for paying down the debt. When selecting cards for transferring balances, she emphasizes the importance of being aware of fees associated with the initial balance transfer, as well as the duration of the 0% interest rate.
There are other popular approaches to start addressing debt, such as the snowball method, which prioritizes paying off small balances first, and the avalanche method, which targets clearing the debt with the highest interest rate initially. Both methods include making the minimum payments on all your debts.
3. Stick to a Budget
Budgeting is recognized as a fundamental element of any financial strategy, and it appears that millennials and Gen Z individuals share this sentiment 41% mentioned that adhering to a budget will be a crucial financial goal for them in 2024.
Whether you utilize budgeting apps, spreadsheets, or opt for pen and paper, successfully sticking to a budget hinges on how manageable your plan is.
“The budget should be clear for you and not overly complex, making it easy for you to regularly review,” advises Gardiner. “I recommend checking it weekly when you initially create a budget.”
Consistently reviewing your budget helps you become familiar with your spending patterns, allowing you to identify instances of overspending, such as on groceries, she explains.
“As you consistently review your budget, you’ll develop the habits and decision-making skills that eventually reduce the need for frequent checks. Over time, once all the elements are in order, you can transition to checking it biweekly or bimonthly,” she adds.
Summary
Many millennials and Gen Z folks are really into money goals for 2024, especially personal finance. Sue Gardiner says being good with money helps your mental health. We looked at key goals saving, paying off debt, and budgeting with easy tips to make things better.
