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Millennials: money

A picture illustration shows a $100 banknote laying on $1 banknotes (Credit: Reuters/Kacper Pempel)

If you have a child in college or living outside the house then you have had this conversation… “Are you coming home from college this weekend?  Yes, can I have gas money?”  Is it just me or does that sound like extortion?  “How bad do you want to see me this weekend?  It’s going to cost you.  I am holding you seeing me as ransom for $20 in gas.”  I realize our national security policy is that we do not negotiate with terrorists but a $20 gas ransom is a good investment.  Oh, but it never ends there, does it?  My personal favorite was being asked for $20 so they can go buy me a $20 gift card from Home Depot for Father’s Day.  But I smile, and make the investment.  And that’s really what it feels like.  But I also realize that things are different.  

Children have always relied on their parents for help in getting started but it’s harder to get started today.  Student loans, depressed job market, unpaid internships, and crushing debt all add up to many young adults having to rely more on their parents than their parents had to rely on their parents. “A lot of today’s Millennials are dealing with a lot of financial factors that their parents, and certainly adults in America, did not have to contend with a generation or two ago,” says Lynnette Khalfani-Cox, an author and personal finance expert who runs the site AskTheMoneyCoach.com.

According to a report just published by USA Today and Bank of America, many parents are like me and appear more than willing to help out their graduating college student. Among those who are, more than 30 percent of us said it’s because our kids “really need help” and 23 percent say it’s because we feel like it’s our parental responsibility to step in. Parents have more empathy for “what young adults are facing in this economy,” says Andrew Plepler, head of global corporate social responsibility at Bank of America.

According to the survey by Bank of America, about two-thirds of Millennials say they save but its only a savings account with a bank. Of those who are saving, only 30 percent have a 401(k) and 20 percent have other investments. The majority of Millennial savers say they’re saving for an emergency, but less than half are putting money toward saving for retirement or a house.  Sixty one percent of older Millennials (26-34 years old), are saving for retirement while less than 22 percent of their younger siblings are doing so.

Interestingly enough, according to Money magazine, 63 percent of Millennials don’t use credit cards.  Remember when the mailbox at your dorm room was packed with credit card offers when you were in college?  In the long run, its probably best that Millennials are shying away from credit cards.  They have seen the damage it can do to a household budget and they are fearful of adding extra debt to already heavy student loans.

So if you have a graduating college student, an older child living at home, or one that is on their own but struggling to get by…what can you do to help them?

First, there are many great Christian ministries such as Crown Ministries that offer online support and guidance in managing money and eliminating debt.  Perhaps suggest your entire family sit together and discuss the reality that ignoring financial concerns wont make them go away.

Second, encourage good stewardship for any debt that they do shoulder.  Making payments on installment loans on time is critical. Whether it’s a car loan, student loan or personal loan, make sure to make at least the minimum payments on time. Not using credit cards is admirable but it may hurt their credit score when buying a house, getting insurance, or even looking for a job.  Have them consider putting a small utility bill on a credit card as a recurring payment to build positive credit history.   They can also get a secured credit card that is backed by funds they deposit onto the card before they can use it.  This too can build positive credit history.

As a parent, my wife and I are excited to watch as our children grow and become more and more independent but we see our help to them as an investment towards that day.  Businesses are encouraged to invest in equipment that will help grow their businesses.  Families are the same.  We need to be good stewards with the resources that God has given us but remember to that the resources are his, are they not?

So the next time I’m asked for $20 for gas money maybe that is the Lord reminding me of grace.  That sounds better than extortion.  “Drive safe…we can’t wait to see you.”