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4 Ways To Better Understand Your Finances For Millennials

March 20, 2020

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I'm Tori!

After successfully saving $100,000 at age 25, I quit my corporate job in marketing to fight for your financial rights. I’ve helped over three million badass women make more, spend less, and feel financially confident.


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Understanding Millenial Finance

This content originally was published by Business Insider.

I grew up with a great financial education from my parents and started my first business when I was 9 years old.

When I left for college, I assumed everyone else understood money as well as I did — but I was in for a huge surprise. I quickly became the go-to person for money advice among my friends.

After starting my first job in marketing and communications, I decided I was going to challenge myself to save $100,000 by age 25 and start a blog, Her First $100K. My blog has turned into a financial- and career-education platform for millennials, and I work as a nationally recognized money speaker and coach. (I also achieved my $100,000 goal this year, a bit ahead of schedule.)

In three years of running my business, I’ve had the honor of working with millennials all over the country. I’ve now coached over 1,000 millennials on personal finance.

Here’s what they’re not doing.

1. Millennials don’t understand the importance of high-yield savings accounts

Opening a high-yield savings account is one of the easiest ways to make your money work for you. Your bank is paying you to keep your money with it. That’s free money, y’all.

Sadly, a lot of millennials don’t seem to know about high-yield savings accounts yet. They use the standard savings account at a local or national bank and earn about 0.09% interest, not realizing they could be earning 20 times the interest somewhere else.

High-interest-rate savings accounts offer 10 to 20 times the average interest rate of a regular savings account. Compare that to the average brick-and-mortar bank rate. Some HYSAs offer a 0.5% annual percentage yield, compared with the average bank rate of 0.09%. That’s literal dollars to pennies.

Once my millennial clients open high-yield savings accounts, they usually love them right away. They know that their money is working for them, not the other way around.

2. Millennials don’t know how to create a budget

Creating a budget means that you need to understand how to split your finances. And if you were never taught how to do these things — which many millennials weren’t, since personal finance isn’t taught in many schools — of course, it won’t come naturally.

I found out quickly through my Personal Finance 101 workshops that many in my audience simply hadn’t been taught how to start a budget and how to track their spending to see if they’re sticking to it.

I created a tool called the 3 Bucket Budget, which is a great beginner platform for learning how to categorize your finances. You break your net (post-tax) income into three categories:

  1. Essentials (bills, utilities, housing, groceries, etc.)

  2. Savings (emergency fund, retirement, house, wedding) — automate this part

  3. Fun (travel, dining out, etc.)

Often, simply writing down your actual versus goals in each of these categories and figuring out how much money you’re spending helps create a visual of your financial situation.

From there, you can make a plan to hit your savings and fun-money goals, which means you’re one step closer to understanding money. After that, the rest comes together.

3. Millennials aren’t checking their credit scores

Your credit score is basically your adulting GPA. In short, it scores how reliable you’ll most likely be to money lenders based on several factors.

The higher your score, the more reliable you look to lenders. This results in lower interest rates and a higher likelihood that your credit application will be approved.

Unfortunately, credit card companies can be predatory when it comes to young adults. It’s not uncommon that the minute you turn 18, credit-card companies begin swooping in to offer you “spending power.” Naturally, this sounds too good to be true (it is), and it can start young people off with bad spending habits, resulting in low credit scores.

A lot of my audience knows that a higher credit score is a good thing, but many don’t know how scores are created and the best ways to improve them.

I help them understand that paying your bills on time and keeping a low debt-to-income ratio will help your credit score, and offer advice for how to raise low scores. I also remind them to check their credit reports regularly to be sure there are no mistakes affecting their scores.

And if you need to get a head start on building your credit score, this is the card I recommend to get started. They value providing financial education for their clients.

4. Millennials aren’t saving money for retirement

Being a millennial means that you were most likely affected by the Great Recession. A lot of millennials in the mid- 2010s were jobless or underemployed or had to go back to school because they couldn’t find work, resulting in more student-loan debt. As the economy has recovered, younger millennials have continued to feel the effects of the recession.

Salaries start lower than they did for earlier generations, which means a slower start to financial freedom. With high student-loan debt and lower starting salaries, many people in my generation feel discouraged about saving for retirement.

What I teach in my workshops is that it doesn’t take much to start, but that starting early is essential. I opened up my first IRA in my early 20s, which was key to my success in saving $100,000 by age 25.

The power of compound interest means that the earlier you start investing, the sooner your investment starts growing and making money on your behalf. Women especially should be thinking about saving for retirement early. We face a retirement gender gap since women tend to live longer than men and face a gender wage gap throughout our lives.

Start by checking if your employer offers a retirement plan with a match. Medium-to-large companies tend to offer this as an employee benefit. This means that if you put in 4% of your pre-tax pay in the account, your employer will match you the same 4%. It’s essentially free money.

Taking money out pre-tax means that you’ll never miss it and that you’re paying yourself first. If you get a raise, try increasing your contribution by 1 percentage point. You most likely won’t feel the impact, and you’ll be paying your future self more.

Millennials get a bad rap for being lazy with their money. But the truth is we had a rough start toward financial freedom and were not given the tools to succeed.

I was one of the lucky ones who had parents who were always careful with their money. As an award-winning financial and career coach, I’m honored to help people in my generation understand their finances and take the reins of their financial freedom.

BTW – f you’re a new investor or just looking for a community to join as you begin your investing journey, we’re building a one-of-a-kind, non-judgemental community where you can learn exactly how to invest, build wealth, and receive exclusive access to Her First $100k. Learn more at


I get asked all the time: what are your favorite money management tools?

Treasury: We’re building a one-of-a-kind, non-judgemental community where you can learn exactly how to invest, build wealth, and receive exclusive access to Her First $100K.

Chase Freedom Unlimited: My go-to travel and dining rewards card that I recommend.

Deserve: The card I recommend for building credit. Great for students.

Capitalize: Did you recently switch jobs or launch your own business? Instead of losing money, roll over your old 401(k) into a brand new or existing IRA with Capitalize. They handle all the paperwork for you and for FREE, including calling the 401(k) provider on your behalf, completing paperwork, and sending faxes.

Personal Capital: The tool I check daily, Personal Capital is the best tool for tracking your net worth and your progress towards goals like saving, debt payoff, and (yes!) $100K. 

The $100K Club Facebook Group: Need some honest money conversations in your life? Join my free community to get your burning questions answered.

Opinions, reviews, analyses & recommendations are the author’s alone and have not been reviewed, endorsed, or approved by any of these entities.

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