Having a great salary is something to celebrate, but as many professionals discover, income alone doesn’t guarantee financial security. A recent study conducted by the CFP Board1 shows that 90% of millennials struggle to achieve their financial goals. The top obstacles? Nearly half (47%) report being overwhelmed by expenses, while roughly one-third face a triple threat: inadequate savings (36%), significant debt burdens from credit cards and student loans (34%), and income that simply doesn’t stretch far enough to cover basic living costs (32%).
Take a moment to reflect:
- Are unexpected expenses like car repairs or medical bills causing you stress?
- Do the credit card bills from your vacation outlast the memories you made?
- Would a sudden job loss leave you scrambling after just a few weeks?
- Do you find yourself surprised by predictable but irregular expenses?
- Is your retirement planning taking a backseat to present-day spending?
- Despite your income growth, does financial freedom still feel out of reach?
If any of these scenarios sound familiar, you’re not alone. Many successful young professionals are discovering that earning well doesn’t automatically translate to being financially secure.
If you’re ready for action, here are 5 concrete steps you can take this week:
1. Create a “true expenses” tracker (1 hour)
- Compile your annual and irregular expenses (car registration, gifts, vacations) or use a budgeting app like YNAB, Monarch or NerdWallet to organize your expenses.
- Divide these annual totals by 12 and start setting aside these amounts monthly.
- Pro tip: Open a separate high-yield savings account just for these predictable “surprises.”
2. Implement the 24-hour purchase rule (Ongoing)
- For any non-essential or impulse purchase, wait 24 hours before buying. This creates time between the initial impulse and the actual purchase to ask yourself:
- “Does this align with what I truly value?”
- “What am I giving up to buy this?” (consider opportunity cost toward savings goal)
- “What emotion is driving this purchase?” (boredom, stress, sadness, FOMO?)
3. Set up your financial safety net (30 minutes)
- Automate saving any extra cash flow until you’re saving 20% of your monthly net income.
- Target to build up to 3-6 months of essential expenses in a high-yield account as your emergency fund.
4. Conduct a debt efficiency audit (1 hour)
- List all debts with their interest rates and minimum payments.
- Check if you qualify for lower interest rates (balance transfers, refinancing.)
- Allocate extra payments to your highest-interest debt first while maintaining minimum payments on others.
5. Schedule a “financial power hour” (60-minute block monthly)
- Review spending against your budget.
- Identify one financial friction point to solve.
- Celebrate one financial win, no matter how small.
Remember: Financial security isn’t about restricting yourself or following rigid rules. It’s about creating a system that works for YOUR life and YOUR priorities.
1 Certified Financial Planner Board of Standards, Inc. “2024 CFP Board Millennials’ Financial Milestones Survey Results.” CFP Board, 2024, www.cfp.net.