Millennials disagree with their finances, but this solution can help

Not only do 41% of young Americans manage to save a portion of their income each month, they also spend more on retirement than any other age group, including Generation X and Baby Boomers. Yet many women of the millennium are confused in managing their money, which undoubtedly causes them undue stress.

According to new data from Northwestern Mutual, only 40% of young Americans think they understand how much they spend and how much they should spend in the future. At the same time, 78% of millennials feel pressured to find a good balance between their current and future spending (for example, paying off their student loans by saving for their own kids' education).

Although millennial stereotypes reduce overpriced coffee by adding a slice of avocado at $ 10, the reality is that many young people feel deeply guilty of pleasuring themselves. 29% feel uncomfortable or nervous about spending money, even if they know that they can afford the purchases in question.

The truth is that Millennials, unlike their older peers, naturally have limited real-world experience. As a result, many could learn over time to solve these problems later. But if you're having trouble managing your money or setting your priorities, consult a financial advisor to get you on the right track.

The instructions you need

Some people think that financial advisors are just rich people who need help to manage their millions. But this is only a myth, because you do not have to be rich to seek outside help for monetary problems, or to have a certain level of income or age. The younger you are, the more you meet a financial advisor for the first time, the more you will benefit.

A financial advisor can not only help you determine what the expense and savings ratios should look like, but also invest your money to best meet your risk appetite and goals. Imagine, you want to start a family in the next 10 years and own a house. Your strategy will probably be very different from that of your neighbor, who has no interest in creating or owning real estate. But without the help of a financial advisor, you might have a hard time making the right decisions.

Of course, you should not just consult a financial advisor. If you are new to this field, you should ask a few questions when choosing:

• What kind of fees are charged? Consultants typically earn money by charging commissions or charging you a percentage of the badets under management. As a rule, the latter is better for you as a customer. However, your goal should be to find a consultant who will disclose his fees, regardless of their amount.
• Is it a trustee? Not all financial experts are directors, but those who work there must always put your wellbeing as a client before their own account. Be sure to focus on advisors who respect the fiduciary standard because they are less likely to sell an investment that generates huge commissions, but not so much in terms of returns.
• How risky are the recommended investments? There is no risk-free investment and anyone who tells you otherwise is not honest enough and does not earn your money.
• How often does it contact the customer? Managing your money is an ongoing process in which you should be involved, even if you outsource this task to a professional. That's why you need to choose a consultant who will communicate with you regularly and schedule regular meetings to evaluate your goals and progress, and to review investment performance.

A good way to find a strong financial advisor is to make recommendations to colleagues, neighbors or family members who are already working with people they are happy with. However, you should always ask the questions above to make sure the right points are covered. In this way, you can manage these conversations with an extra level of security.

This article was written by Maurie Backman in English and published on 27.10.2018 on Fool.com. It has been translated so that our German readers can participate in the discussion.