What would you be willing to sacrifice to start a debt-free life? According to micro-investing app Acorn’s new survey of millennials’ financial spending habits, almost half are willing to go to extreme lengths to wipe the red out of their ledgers.
Out of the 1,911 people ages 18-35 that Acorn surveyed, 46% said they would give up the opportunity to meet their favorite celebrity, while 16% were prepared to eat home-cooked meals and skip going out to eat dinner. A smaller percentage of millennials were even willing to be imprisoned. Almost one in ten millennials said they would be willing to go to jail for a week to pay off $10,000 in debt. If millennials were willing to be imprisoned for a hypothetical scenario, what they would actually give up could be even more extreme, because most millennials face a grimmer reality than $10,000 in debt. The average college graduate in 2016 left school with $37,172 in student loan debt.
But when it came to their long-term financial future, there was one action that millennials were less willing to give up — their daily cups of coffee. Forty-one percent of millennials admitted they spent more on coffee last year than they invested in their retirement account.
Survey: 71% feel uneducated on financial matters
Spending retirement money on coffee could be due to a lack of financial knowledge. Overall, the survey found that millennials are preoccupied with a financial future that they feel ill-prepared to handle. Seventy percent of millennials believe their education did not prepare them to manage their own money. Half of millennials said they knew that investing was an important skill to learn, but did not know how to do it. Only eight percent of millennials reported that they were currently saving for retirement.
These findings go against the basic advice of financial advisors, who want you to start saving as soon as possible to increase the amount of compound returns you can get. As one investment strategist put it, “The value of compounding means you’ll have to contribute less later.”
To have a retirement package your older self can be proud of, you need to play the long game. The more money you save now, the more time you give your money to grow into a financial safety net you can fall back on long after your career ends.