Why 70% of Millennials Won't Be Able To Retire

all right guys we need to talk about this today I don't wanna scare anyone I don't want to sound like a debbie downer but it's something that we need to discuss and that is why a lot of Millennials are essentially screwed when it comes to their financial future and look this isn't something that you have to be part of a statistic but the broad majority of people the vast majority are going to find themselves in a very sticky situation when it comes to personal finances especially in the coming year so what we're gonna do in this video is I'm gonna lay out some of the problems show you some of the lis problem areas that people are facing with their finances and then how we can sort of counteract this how we can combat this and not be part of this statistic because when you look at the numbers it's very difficult for Millennials to to start to build wealth to start to increase their income and find themselves in a better financial position overall and you know the other day somebody asked me why do I care about personal finance so much why do I seem to talk about money very often and for a minute I started to think maybe I overthink this maybe I shouldn't think about finances at all and I should just go on living life and not worry about money at all and it sort of make me think that you know there is a point where you don't want to think about personal finance but at the same time you need to be proactive about it and I have so many friends who think that money is inherently evil and so therefore they never ever think about money and they're swamped in debt they have tons of credit card debt they have $40,000 in student loans and they're absolutely poor and they can't do the things in life that they want to do because they have nothing to have no money and so it's important to put it somewhat in a prioritized category in your life obviously you need to prioritize things in life more like family and friends and other things like having fun in life and getting value out of it but money should be or at least for myself it's certainly up there in that area of prioritizations in life and so what we're gonna do in this video is I'm gonna show you everything that you need to know when it comes to this when it comes to where the problem areas are and then how we can get around that so let's just start right now and let's start with some statistics which came out that are gonna kind of lay out why this is going to be an issue for a lot of Millennials and why a lot of Millennials are going to struggle to retire in the future and one of the first things we need to look at is the average income of millennion was about thirty five thousand five hundred and ninety two dollars per year by the way I've memorized like all these numbers so make sure you drop a like on the video and subscribe if you haven't done so already but thirty five thousand five hundred and ninety two dollars per year is the average income for Millennials now maybe you make more than that maybe you make less than that that's okay okay we're gonna get around that and show you essentially how you can pay off debt how you can find yourself in a better financial position by kind of laying out some of the principles in this video but with that income we're gonna take away some money for taxes so let's give you the benefit of the doubt and say that you were able to live in a state that doesn't have any income tax and so if that was the case you would pay about a little bit over fifteen percent tax on your thirty five thousand five hundred ninety two dollars per year so your total tax burden would be about five thousand three hundred and sixty three dollars over the course of the year so you're left with about thirty thousand two hundred and twenty nine dollars which comes out to about two thousand five hundred and nineteen dollars per month now with this twenty five hundred dollars a month this could look like a decent amount of money right but when we start to add up the expenses that we have in our lives there's three major expenses and it goes in this order in America and likely throughout most countries in the world the number one expense is housing then we have transportation and then we have food so just from those three alone it's going to put a pretty big dent in our paychecks so the average rent in America for a one-bedroom apartment or a one bedroom living area is about nine hundred and sixty dollars a month and we've seen these numbers a little bit over a thousand dollars as well and it obviously depends on where you live in the country I have friends in Arkansas who are paying $400 a month for an apartment and then I friends in Manhattan or people who are know in Seattle who are paying well over $3,000 a month for their one-bedroom apartment so the average it's about nine hundred and sixty dollars a month and that takes us down to fifteen hundred and fifty nine dollars a month that we have left over in our paycheck now we're gonna take away transportation costs which are 706 dollars per month now there might be sort of a startling statistic for a lot of people because most people don't think that they're paying 706 dollars a month for transportation and I know that I certainly didn't think about that at all by the way most of these numbers are coming from the Bureau of Labor Statistics or a number of other different sources like this one is from Triple A which is a very very reputable source for these stats now with 706 dollars per month it seems so far away it seems like wow that there's no way I'm spending that much money I paid $3 a month for a car payment how can I be paying 706 dollars a month well when you start to add up the numbers you might have three two dollars a month in car payment then you have to factor in the depreciation of your car because every year every day and every time you drive an extra mile with your car it D values and it depreciates in value so maybe it's a couple hundred dollars a month in depreciation then you factor in maybe a couple hundred dollars a month in gas and wear and tear on your vehicle you have to pay for expenses for maintenance for your car to get inspected by your mechanic and once you factor in all these costs and insurance you're paying 706 dollars a month on average for transportation costs that's quite a bit that takes us down to eight hundred and fifty three dollars a month that we have left over just by paying for housing and transportation now let's factor in foon let's say you can do two hundred fifty dollars a month which is honestly pretty good certainly below the average expenses for food in America but two hundred fifty dollars a month well that's one thing that I don't think you should ever really cut back on too much in terms of eating good food right because your health is something that you should certainly prioritize quite a bit over other areas those are the three expenses and that we use to us with six hundred and three dollars per month but guess what we haven't talked about health insurance we haven't talked about retirement account contributions we haven't talked about clothing we haven't talked about your student loan payments which are an average of three hundred ninety three dollars per month so once we start factoring in all these other payments you're gonna find yourself in a very sticky situation or at least on average for most Millennials and this is kind of where the problem occurs then we're gonna show you how you can kind of fix this problem okay so with six hundred and three dollars left over let's say that you don't want to forego health insurance this is something I think everybody should have and the average monthly premium in America for health insurance is four hundred and forty dollars a month now maybe it's more in other countries and it might be less in other countries but four hundred and forty dollars a month that leaves us with a hundred and sixty three dollars a month at the end of the month and we haven't even talked about so many other expenses that you probably have you probably have phone bills you probably Wi-Fi bills you probably have the number of things you have to buy for your house or apartment your student loans your credit card bills but there's so many things that we haven't included in this and you're already at only one hundred and sixty three dollars per month and so now you can see the problem that a lot of millenials are facing and maybe of this problem as well what we're essentially in this budget deficit that's what we would call it I tend to think of a lot of personal finance sort of as business or even how governments work where they have budget surplus or budget deficit when you're in a budget deficit it means that you're spending more money then you're making per month now how do we fix this how we fix this problem so that we can start contributing to our retirement account how do we fix it so that we can retire earlier or make sure that we retire by the average age of 63 in America what can we do well first of all you need to run a budget and you know I've said this so many times some people might be getting sick of it but I know that 80% of people watching these videos are not running a budget they're not keeping a budget it's super simple at the end of the month or at the beginning of the next month track your monthly expenses from the previous month so we're in December now what you can do is just look back on November and say how much money did I make and maybe you made twenty five hundred dollars in the month and then how much money did I spend just track those numbers write them down on a piece of paper or use an Excel spreadsheet that's what I do it's super simple but you need to do that as step number one to start to close that gap and find yourself with more money at the end of the month and then having less money at the end of the month one of the worst things that people do and it it stresses me out honestly thinking about this is they find themselves where they're spending $400 a month more than they're making and so to make up for that they pay for things on a credit card because they they can't make up for it so they pay for with the credit card and it puts them in a deeper hole in a deeper hole and they find themselves swamped in debt now the average student loan debt in America is over $30,000 when people graduate from college that's the average monthly payment of 393 dollars a month I know most people have some type of student loans that's another thing we need to worry about and it's something we're actually to talk about in the next video on Thursday when we release a video about how to pay off debt especially on a low income so once again make sure you subscribe to the channel for that now besides running a budget what else can we do well one thing that I think is essentially really really important this probably the most important aspect of this video right here is the way that I view personal finance is that you can go on the defensive or you can go on the offensive relate this to sports in a lot of ways okay so a lot of people when they see that they're spending more money than they're making they say I need to start saving money so they start cutting back on housing expenses they start cutting back on food costs they start cutting back on on transportation and health care and important things in their life and this is certainly a strategy you can play defense but teams don't really win games by simply playing defense and not focusing on offense so if you really want to win financially what I personally do from my approach is I focus on defense but also really heavily on offense and the offense side of this is to focus on ways to increase your income so if you're making twenty five hundred dollars a month and you're spending three thousand a month you're in a net budget deficit of $500 right how can we increase our income one way is to obviously start a business start a side hustle you've probably seen videos on this channel about that we have a lot of videos about how to increase your income but another strategy is to just go into work and ask for a pay raise now some people don't want to do this because maybe they're new to their job or they feel like maybe they haven't done as well as they should in their job but if you've been working your job and you haven't gotten a pay raise and quite some time just going to work and say I want to raise here's why I want to raise lay out everything every reason why you deserve a pay raise and if you get fired don't don't blame that on me but I've had a lot of people who will just DM me on Instagram they'll say Nate you told me to get just going to work tomorrow and ask for a pay raise and I got a dollar fifty an hour more per hour and you know that's a great feeling and so I wouldn't be afraid to go into work and just see if you can get more money from your job especially if you haven't gotten one in quite some time but find ways to go on the offensive and that way you don't the cut those things in life that are really important like health care or you don't have to cut those things like taking your kids on a vacation somewhere taking them to Disney World whatever it is you can still afford to do that if you focus a little bit on defense certainly focus on defense don't go to Starbucks every day don't be spending thousands of dollars on useless things that you don't need but at the same time I focus heavier on offense so that I can still afford all these other things in life by just simply increasing my income okay so those are my biggest tips for you guys if you have any questions comments leave them down below in the comment section below like I said Thursday we're coming out with the video on how to pay off debt on a low ink if you're interested in it let me know because if people don't want to see it then I just won't put out the video but I've gotten a quite a bit of questions on it so you know we we don't sell anything on this channel I sell nothing no products no informational products this is all just free information so I really appreciate all the support and I'll see everybody in the next video

Channel: Nate O'Brien

Views: 75,492

Rating: 4.8932552 out of 5

Keywords: bank accounts, financial freedom, financial tips, how to save money, how to save money fast, manage money, money, money management, money saving tips, nate obrien, personal finance, save money, saving money, spend money, ways to save money, millennials, millennial money, retire early, retire

Id: T5C9XSEf6SY

Length: 11min 30sec (690 seconds)

Published: Mon Dec 02 2019