Why Saving Your Money Isn’t Always A Good Thing

Learning the basics of handling your finances can take a few years when you’re young. Your paycheck seems to be spent before it’s signed and the struggle to put away some – any – of it in your savings account is a tough one. But once you’ve finally mastered how to budget and save for a rainy day and still have some leftover, you’re golden, right? Wrong. Most young people think that if they’re saving money every month, they’re ahead of the curve, and they’re not necessarily mistaken. Last year, Forbes reported that 69% of Americans had less than $1,000 in a savings account, which is staggering in its implications. However, millennials not only need to save for the coming weeks, but also the coming years and decades. And that means one thing: investment.

It can seem scary and risky to hand over your hard-earned money to the market, essentially kissing it goodbye from your daily life. However, building a nest egg is something that young people need to do now, because they’ll get the best returns from long-term investments. Additionally, the future of social security is murky and conservative estimates of the housing market see it increasing 60% in just 30 years, so young people need to start thinking about how their lives will continue once they’re not young anymore.

However, this is the generation that came of age when the bubble burst in 2008, and getting them to trust the market is hard to do. Though the market has yielded positive returns every calendar year except that one since 2003, young people still remember when their older relatives and friends lost a good deal of their nest eggs in a matter of weeks. That can leave a scar on the financial psyche of an entire generation, and rebuilding that trust will only come with time – and education. If you don’t have investments and are in a position to make some, consider buying a book or taking a course on financial literacy. Chances are you’ll pick up some valuable know-how about providing for yourself and your family long-term, and you’ll gain peace of mind while doing so!