Money on Your Mind: Preparing for retirement right now

The Great Recession of 2008 was brutal, but most millennials were kids or teens when the downturn hit. That’s why it’s absolutely crucial this group learn what to do to prepare financially, now that another recession could be on the way. FOX 46’s Diana Alvear has a checklist for what they can do today to get ready.

We’re working with Roger Howard, a Charlotte young professional who says his twenties have been good to him. He has a successful career in real estate and a thriving social life. However, he says turning 30 has been a turning point.     

“I want to buy a house, I want to have a nice little nest egg of savings," Howard said. 

By his own admission, Howard’s finances have not been a top priority.

“I think I’m like most people my age who sure we save a little here and there, not quite enough and we don’t think about it.”

FOX 46 is getting him results by partnering with Prudential financial advisor Andrea Buschur. She has a five-point plan that starts with creating a budget. 

“What I find with a lot of my younger clients is that they have absolutely no clue where their money goes,” she says. 

Buschur says tracking your spending will allow you to see where your money is going, and more importantly where you should cut back. 

Next, tackle your debt. In Howards’s case, it’s mostly student loans.

“I spend a good chunk of change on those, they’re definitely not going anywhere. It’s like paying for a luxury vehicle I’ll never drive,” he admits. 

According to one recent survey, the average student loan balance for millennials is more than 34,000. That number has grown 8 percent since last year. 

Credit card debt also weighs millennials down. Only 22 percent of them are debt-free. 

That’s why Buschur says it’s step two to financial freedom.

“Now is a great time to get educated on all of your credit cards, your student loans, your car loans, what those terms are so we can set in and decide which ones to pay off first,” she says. 

It’s also a great time to renegotiate a better deal, according to Andrea. 

“A lot of times we just get on the phone and talk to the loan company to find out what are the requirements of your student loan. Is deferment an option? How long do you need to be unemployed? What if you become disabled? Is refinancing even an option to get it at a better interest rate?” 

These are all great questions you should be asking, she says. 

Step three, save at least three to six months of living expenses.

“For my single folks, I recommend the six months for your expenses in that emergency fund, because if you lose your job, you don’t have your partner to help out with paying the bills," Buschur said. 

Next, get to know your employment benefits, starting with retirement savings:

“If you have a company 401K, please enroll in it and begin at least systematically investing in it,” she says. 

She says it’s important to remember that the younger you start, the more effective compounding will be.

Finally, regularly update your resume and LinkedIn profile, and get social offline as well.

“When companies really need to cut expenses, headcount is where they go,” she says. It’s much easier and way more fruitful to expand your network and make connections while you’re still employed. 

For Howard, this reality check is both sobering and liberating. He’s ready for a financial roadmap, one that eventually leads to a secure retirement. 

“I really need to look at my 401K for sure,” he says. “I keep forgetting I’ll be my parents’ age one day.” 

If you’re a millennial interested in learning more about your finances, or you know one who may need the help, just head to Diana Alvear’s Facebook page to get in touch with Andrea Buschur.