Millennials might be mired in debt, not saving for retirement, and delaying medical care, but there are 5 things you can do now to buck the trend

• After coming of age during the Great Recession, millennials are facing a unique set of financial struggles. 
• Using findings from Insider and Morning Consult’s latest survey on Americans’ financial health, we identified a few pain points for millennials in particular.
• From saving for retirement to paying off credit-card debt, here are a few tips for bucking the trend.
• Read more personal finance coverage. 

Many American millennials are in dire straits financially.

It’s easy to blame low income for bad financial habits — as many millennials do — but the truth is that it’s possible to build wealth no matter where you start. Most people want it to happen overnight, but that’s exceedingly rare. It takes consistency, patience, and good habits to build a solid financial foundation.

Getting out of debt, saving for the future, and preparing for unexpected emergencies should be a priority no matter your age or income. Based on data from a recent Insider and Morning Consult survey, we identified a few financial pain points for millennials.

These tips for improving may seem small on the surface, but as financial expert Ramit Sethi says, they’re “big wins.” Enough of these smart choices will compound, placing you squarely on the path to building wealth.

1. Use your employer-sponsored retirement account

According to the Morning Consult and Insider survey, 12% of millennials have a retirement savings account but aren’t actively contributing to it.

If your employer offers a 401(k) or 403(b), there’s no reason not to open one — but don’t stop there. Contribute as much as you can, even if it’s just $100 per paycheck or a small percentage of your salary. If your employer offers to match your contributions up to a certain amount, make that your starting point. There’s no use in missing out on free money.

The biggest advantages of these workplace retirement plans are that your contributions are automatic and the money is tax-deferred, meaning you don’t have to pay income taxes on the amount you put in until you withdraw it in retirement. Not only does this give your money greater opportunity for compound growth, it lowers your taxable income now.

2. Open a retirement savings account elsewhere

If your employer doesn’t offer a retirement plan, don’t excuse yourself from saving.

Almost anyone can open an Individual Retirement Arrangement, or IRA. You can find these accounts at investment brokerages, robo-advisers, and traditional banks, and they offer tax advantages, too. 

Just like a 401(k), you can set up automatic contributions to a traditional or Roth IRA. In part because the annual contribution limits are lower for these accounts than workplace plans ($6,000 maximum in 2020), most financial experts recommend funding both a 401(k) and an IRA. That’s right — it’s not an “either, or” situation; it’s “both, and.” 

3. Automatically build up your emergency fund

Emergencies happen and having some cash on hand ensures you don’t have to go into debt to take care of the expense — or worse, ignore it all together. According to our survey, nearly half of millennials have had to delay medical or dental care as a result of their finances. That’s more than any other generation who responded to the question. 

As healthcare costs continue to climb, building up an emergency fund with at least three to six months worth of expenses should be a priority. You don’t have to use the money just for medical emergencies either — consider it your financial safeguard against job loss, costly car repairs, home repairs, and anything else that crops up.

Make it effortless by setting up direct deposit or regular automatic transfers into a high-yield savings account. The money will be safe, accessible, and earn up to 20 times more interest than a regular savings account.

4. Make a plan to pay off debt

It’s no secret millennials are mired in debt. Over half are in credit-card debt, a quarter owe money on personal loans, and nearly 30% have student loan debt, according to our survey.

And yet, about 30% of respondents with credit-card debt have little to no stress at all about paying it off.

Not all debt is detrimental to your financial health, but credit-card debt should be taken seriously. According to the survey, half of people who’ve paid off debt did it simply by following a payment plan.

Here’s one suggestion: If you’re balancing paying off debt from multiple sources, focus on the ones with the highest interest rates first — this will probably be credit cards or private student loans. Experts call this the debt avalanche method.

If you can afford to make more than the minimum payment, do it. This should be one of the only excuses to pause your retirement savings. The sooner you pay off high-interest balances, the less money you’ll pay in interest over time.

5. Celebrate a raise, but use it wisely

Pay raises have been hard to come by for millions of Americans of late, the Morning Consult and Insider survey revealed. But even among those who have been able to boost their pay in the last year, 42% still aren’t saving for retirement.

It’s easy to inflate your standard of living when you bring home more money, whether it’s traveling more, moving into a nicer neighborhood, or bumping up your self-imposed weekly Postmates quota (we’ve all been there).

But a raise is actually the perfect time to increase your retirement contributions because you won’t even notice the difference. Say you get a 10% salary increase and bump up your automatic retirement contribution by 2% before the new paycheck even hits your bank account. Your savings are set and you’ll still see more money in your pocket.

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