Millennials

Prenuptial Agreements On The Upswing

November 14, 2017 By Twila Van Leer

Deciding before the “I do’s” how they are going to handle their combined assets is become a more popular approach for Americans. A prenuptial agreement can prevent hassles down the road and ease out the bumps that often cause trouble, experts say.

For instance: One of the partners is a very careful budgeter and keeps close track of her assets. Her fiancé tends to be looser in his money management and doesn’t shy from a few risks. An agreement in writing may help the couple find middle ground they both can live with. If, unfortunately, the marriage doesn’t work (half of them don’t) there is more solid ground for settling things.

One couple agreed to separate her retirement savings from his business funds. She had the peace of mind that her retirement would be more secure. He was on notice that he needed to remain within his means as he undertook new ventures.

Millennials tend to put off marriage until later in life than did their parents. They are more likely to have established careers, businesses and property. They can be protective of these assets. They are more open to a prenuptial agreement. Old perceptions that such an agreement is unromantic or selfish or that it indicates a lack of trust are being set aside in favor of a practical approach.

Back in 1975, about 43 percent of women were stay-at-home mothers and housekeepers. In 2016, that figure was 14 percent. The majority of women now have assets of their own when they are ready to marry. They are not as dependent on a husband for their living.

Prenuptial agreements have gained popularity for all these reasons. The increase of divorces in America also is a factor, according to the American Academy of Matrimonial Lawyers. An academy survey said that 62 percent of the lawyer members had seen an increase in the number of couples seeking prenups in the past few years, especially among those in the Millennial age span.

The pre-marriage agreements have also changed, the academy found. Initially, they were seen as a way to protect one of the partners if he or she had more assets or appeared likely to benefit from inheritances.

Now, they focus on such things as property and dividing debt, particularly student loan debt. The agreement can forestall sticky situations in the future. One man, for instance, wanted to assure his parents, who were likely to bequeath him a considerable amount of money from their business, that his inheritance would stay in the family should his planned marriage fail.

For some couples, such an arrangement is “the first step to a divorce.” But for some couples, pre-existing situations make a prenuptial understanding a good idea — for instance, when there are children from a previous marriage.

Some couples bypass the prenuptial agreement, but make legal arrangements after their marriage to address issues that could become stumbling blocks.

The experts defend pre-marriage agreements on the basis that “marriage is a financial decision and divorce is a financial decision” and the best approach is to keep them upfront.

Millennials Shun Investment Markets

October 30, 2017 By Twila Van Leer

Millennials Investing — Millennials tend to shy away from the usual investment markets to a greater degree than other age groups

When it comes to personal finances, today’s Millennials tend to shy away from the usual investment markets to a greater degree than other age groups, according to research by Wells Fargo.

The bank surveyed more than 1,700 individuals relative to financial literacy and opinions about the investment markets. Twenty percent of those in the Millennial age group (20 to 36) said they would never invest in the markets. Another 53 percent said they would be uncomfortable making such investments.

That raises concern among the experts that the Millennials won’t be ready for retirement when it rolls around. The prevalence of student loans in the age group is a factor. The average debt is now $34,144, up 62 percent over the past 10 years. Repayment often runs well into the prime earning years.

Wells Fargo devised a Positive Financial Indicator to determine how well an individual is faring financially. The five attributes of those in good financial shape are: Having enough money to put some into savings; saving specifically for retirement; a perception of being in control of finances; taking an active role in setting and achieving goals; and the ability to pay monthly expenses without strain.

Those who score higher on the indicator tend to be happier and more confident about finances, the bank found.

The survey also indicated more healthy attitudes among the Millennials who communicate with parents and grandparents on financial issues.

Graduating From College? What Next?

October 21, 2017 By Twila Van Leer

There’s an interesting dichotomy related to the college grads who are diving into first post-college jobs this spring. The majority, 69 percent, have student debt and almost exactly the same percentage, 70, said their college didn’t prepare them for real-world personal finance decisions.

Finance leaders/researchers Experian and KeyBank both reached the same conclusions. Bottom line, about one in five graduates has a sense of their financial goals, but are not certain how to reach them.

Based on the numbers, KeyBank offers these insights to grads and those who share a financial link with them:

Budget. The first paycheck post-grad may look large, especially compared with the part-time, campus and vacation jobs that are typical for students. New realities call for new budgets. Be sure to include all income and all fixed expenditures, including student loan payments, rent, utilities, transportation, clothing (Your new status might mean a new wardrobe), insurance, food and other necessities. Then work on a budget that leaves 10 percent of your income unencumbered so you can begin saving. If necessary, make lifestyle changes to support your decisions. Learn early the difference between wants and needs.

Establish a savings strategy. Small but consistent steps will eventually make noticeable results. A three-pronged approach provides for short-term goals, long-term goals and retirement. Keep an emergency fund intact, building up to a three- to six-month cushion. Try to have sufficient savings that you don’t have to use a credit card for car repairs and other unexpected expenses. Take advantage of your employer’s 401(k) plan if they have one. Start with the minimum necessary to trigger the employer match and increase your contribution by 1 percent per year until you are saving 10 to 15 percent of your salary. Learn about investing and when you are able, start. Know about compounding and be patient. A small investment, well-managed over time, can become a substantial nest egg against retirement.

Take a crash course in credit, preferably before you need to use it. It’s part of the financial reality for the majority of Americans. Know about credit ratings, how they are calculated, how you can protect your own and how you can maintain a respectable score that will kick in when you want to purchase a home, car or other top-ticket item. You’ll hear talk of “good credit” and “bad credit,” but what it boils down to is good or bad credit management.

Millennials Falling Behind Boomers

April 8, 2017 By Twila Van Leer

Millennials are 20 percent behind what their parents were doing at the same age in life.

In the normal course of things, it is expected that each generation of Americans will be better off financially than the one before it. That is not holding true for the Millennials. They are lagging behind their Boomer forebears by an average 20 percent in earnings.

The Federal Reserve’s latest figures, as interpreted by the advocacy group Young Invincibles, show that, with median household income at $40,581, the Millennials are 20 percent behind what their parents were doing at the same age in life.

The facts run counter to the wisdom that education is the answer, since the Millennials outstrip their elders in that category.

The M generation boasts less home ownership and has half the net worth of the Boomers. Their education debt is significantly higher, the data show.

The scenario is not good for the new administration, which has pledged a return to post-World War II economics. Culture and identity issues that split the country are factors. White Americans still earn much more than Latino or Black peers, but they have also seen their incomes drop the most, relative to the Boomers.

Many of the Millennials bemoan the fact that at their ages, their parents had homes and were rearing families. Too many of today’s college graduates are working at low wages in jobs that have nothing to do with the courses they took.

Education does have an effect in boosting incomes, but the median college-educated Millennial who has student debt is earning only slightly more than a Boomer without a degree did in 1989, the figures say. More young Americans have a college education, with some 35.6 percent of those 25- to 29-year olds boasting a degree, compared with 23.2 percent in 1990.

In1989, home ownership for the earlier age group was 46 percent. It has dipped now to 43 percent, and the median net worth of the average Millennial is $10,090, 56 percent less than that enjoyed by the Boomers at the same age.

Despite being born at a time when opportunities seemed at a crest, downward mobility is the trend for white Millennials if the current numbers tell it like it is.