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Millennial Money: Don't Let Anxiety Rule Your Finances

Financial decisions are rarely easy, either buying your first car or home or deciding to refinance student loans.

Anxiety can be heightened for millennials who witnessed economic turmoil during the Great Recession as they weighed in as striking financial choices as adults.

"Many millennials grew up and saw their parents lose a home or had to postpone retirement," says Brad Klontz, financial psychologist and associate professor at Creighton University. "Of course, they will be anxious."

In fact, a survey this year by insurer Northwestern Mutual found that this generation not only has a stronger inclination to make financial plans compared to older generations, but also has a higher level of anxiety about whether they are following the strategy. correct.

The survey found that 66% of millennials (born 1981 to 1996) said they were "highly disciplined" or "disciplined" financial planners, compared with 60% of generation X (born 1965-1980) and 52% of baby boomers. (born 1946-1964). At the same time, 70% of millennials said their financial planning needs to improve. This is compared to 68% of Gen Xers and 52% of baby boomers.

There are ways to reduce the stress of financial decisions. Begin by identifying your attitude toward money. Then take custom action for yourself and look for other people who have been there.


Many of us grow up with a specific approach to money, often learned by our parents, absorbed by those around us or informed by our own experiences.

Being aware of your relationship with money can help you avoid pitfalls like worrying too much. Klontz, author of several books on finance and psychology, says he has found four common approaches to money: worship, avoidance, vigilance, and status.

For example, those who are vigilant about money always worry about having enough and have trouble making spending decisions. On the other hand, avoiders don't look at bills or statements until absolutely necessary, Klontz says.

Another source of insight into his financial mindset is Gretchen Ruby's book "The Four Tendencies," which explores what drives people's decisions. It classifies people as debtors, questioners, rebels, and defenders. (You can take the Rubin test online to see what it is.)

"Your" trend "shapes your perspective of the world and influences what types of (financial) strategies will work for you," says Rubin. For example, a "questioner" likes to do his own research and will only seek outside advice he can trust, Rubin says.

Take action tailored for you

Once you have identified your attitude toward money, use this knowledge to ease the anxiety of financial decisions.

Make a To-Do List: People who don't know where to start can start by making a to-do list, says Eric Tyson, author of "Personal Finance for Laity" and former financial advisor. You can calculate how much money you earn and spend each month or add tasks like saving money to a goal or getting your credit in shape for a loan.

"Prioritize, get some early wins," he says. "Don't be surprised that you should do this quickly."

– BE RESPONSIBLE: If you are an obliger and want to save money on a goal, use the responsibility to get started and stay motivated, Rubin says. This could be in the form of friends, a financial advisor or thinking about what you want in the future, she says.

– VIEW THE END GOAL: If you are a "rebel" who doesn't like to know what to do and wants to pay off debt, think about the freedom you will have when you have no debt. Set up automatic payments so you don't have to think about them, says Rubin. The automatic payments option is effective for anyone, she notes.


Tyson says the biggest mistake he saw people make is that they don't get advice – or trust a source – before making a financial decision.

"If your uncle Joe seems financially savvy, you can manage your thinking for him, but you must be selective in accepting a person's counsel as a gospel," says Tyson.

Do your own research as well as chat with family or friends. Consider visiting a personal finance website or downloading an app to help you manage your money.

If you want the perspective of an expert, turn to a fee-only trustee. Consultants who are paid only for fees, not commissions, have fewer conflicts of interest; those who follow the fiduciary standard put the interests of clients ahead of their own. Or you can set up a free consultation with a nonprofit credit counselor.


This column was provided to the Associated Press by the personal finance website NerdWallet. Amrita Jayakumar is a writer for NerdWallet. Email: Twitter: @ajbombay.


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