By: Ian Maddox, CRPS®

This may not come as a surprise, but many 20-somethings in the U.S. have not saved a single dime towards future needs. There are many reasons for this, but the simple fact of the matter is that if this trend does not reverse, it could be devastating for an entire generation of Americans, and even the economic fiber of our nation.

When it comes to millennials, a few themes emerge that impact their savings rate. A combination of debt, lower relative income and a general pessimism about the state of our social structure have become a recipe for inaction. Our schools have not done a good job teaching young people the importance of financial planning, college degrees aren’t leading to the jobs and salaries they did previously, and we have recently experienced two market collapses that might lead you to believe capitalism is dying. But as the millennial generation is likely to live longer than previous generations, it is critically important to stress two historical principles: it is always wise to set something aside for a rainy day and retirement, and compound interest is powerful.

There is no simple way for you to get rid of your college loan, magically make your boss give you a pay raise, or cause a job in a field that you studied to materialize. What you can do is own your current situation, even embrace whatever financial condition you find yourself in, and put one foot in front of the other. Even if you aren’t working in your field of study or making what you had hoped, your job may still provide a suite of benefits, including a 401(k) or a 403(b). If you aren’t contributing to that plan, and certainly if your employer offers a match, start now! A hypothetical example of a 25-year-old deferring $50 of their pay per month (remember this is happening pre-tax) for 45 years and earning a moderate 7% rate of investment return will end up with $183,451. That’s not rich, but it’s not chump change either.

As we move further into spring many of us begin compiling an outdoor project list: fertilizing grass, planting flowers, garden beds and trees. Why do we do these things? We plant seeds because we want to release their potential and we want what they can produce in the future. I am encouraging millennial readers (or anyone who has yet to start planning) to adopt this same mentality when it comes to financial planning. Even if it is only $25, $50 or $100 a month, plant your financial seeds today, and potentially remove some financial stress from your future.

About Hitchcock Maddox Financial Partners (HMFP):

HMFP is a comprehensive and collaborative financial planning firm headquartered in Trussville, AL, serving clients and their community since 1999. Collectively, HMFP advisors have provided guidance in the areas of Financial Planning, Investing, Retirement and Insurance for over 35 years. For more information please visit or call 205-201-1401.