Millennials Have Unique Goals, and They’re Saving Differently

Key Takeaways

You know the refrain by now: Millennials are doing things differently. Whether getting married later in life (and keeping their finances separate), planning for early retirement or buying a house later than any previous generation, they have decidedly different goals for their finances.

Here are some unique goals millennials are saving for and how they’re saving for them.

Saving for Experiences

Millennial: Trysta, founder of a travel tips website
Goal: Sabbatical

How They’re Saving:

33-year-old Trysta is a travel expert, writing in her free time while working full time for corporate America. She’s saving to take a one-year sabbatical from work to travel around the world in the next few years.

“Achieving this dream requires careful planning and smart saving strategies,” explained Trysta.

She started her journey by creating a clear and specific financial goal so the question, “Have I saved enough?” wouldn’t keep her up at night. She factored in expenses like accommodations, transport, food and activities, using previous trips as a template. After adding a cushion for emergencies, Trysta had a realistic target to work toward.

The next question was how to reach her savings goal. She created a detailed budget of income versus expenses, paying close attention to spending she could cut, including eating out and impulse spending. All those cut costs went straight into a travel fund.

“I even got rid of my apartment and moved in with my family to lower my living expenses,” Trysta said.

To avoid spending, Trysta started automating her finances where she could, setting up automatic transfers from her checking account to a dedicated travel account—a high-yield savings account. Should she decide to travel more in the future, she can also set up investment accounts with a longer time frame for those excursions.

While saving for this goal has meant sacrificing in the meantime, Trysta knows the faster she can save now, the sooner she can hit the road.

Wealth-Building for a Business

Millennial: Brian, Business owner
Goal: Growing his dream business

How They’re Saving:

As the founder of his own water filter company, Brian knows firsthand how expenses can stack up. “Many of us entrepreneurial-minded individuals are channeling our savings toward business ventures and personal aspirations,” explained Brian.

Brian’s goal is to invest as much as possible into expanding his business operations, including everything from scaling production and technology to hiring new talent.

It also means prioritizing a financial safety net (such as an emergency fund) for unforeseen circumstances, from an economic downturn to industry challenges.

To achieve his goal, Brian takes a holistic look at his business and his life, using a budget to determine the salary he can live on while investing the remainder of the company’s profit back into the business.

“By redefining success and redirecting our savings toward business ventures, financial security and making a positive impact, we millennial business owners are shaping our own path to success.” Brian is choosing to reinvest profits back into the company when possible and using his free time to help other entrepreneurs in his local community get their businesses off the ground.

Saving for a Second Career During Retirement

Millennial: Jon, Entrepreneur
Goal: Owning a winery

How They’re Saving:

Forget about purchasing a home, Jon and his wife plan to purchase a winery. The duo wants to retire early from their day jobs to make wine.

While it’s not a dream career for either of them, “We believe it will be a fun and low-impact gig in our later years,” Jon said.

The duo is just one of many millennials trying to reach their goals using the FIRE (Financial Independence, Retire Early) philosophy. Their plan veers closer to Barista FIRE, which means that once the retirement savings goal is achieved, you take on a part-time job to continue generating income, with the opportunity to have benefits like health care.

Jon is upping his IRA and 401(k) retirement contributions while being mindful of how much cash he has on hand to reach his goal. “Depending on how soon we can find a winery to buy, we might purchase it long before we plan to live there,” Jon said. If the property is right, they could rent the fields to other growers or wineries, generating some extra income before they take over.

Cashing In for a Home

Millennial: Tim, Insurance professional
Goal: Buying a home with cash

How They’re Saving:

The housing market’s been anything but predictable the past few years. From sky-high listing prices to fluctuating interest rates to higher inflation, affording a place of one’s own has been complicated.

That’s why Tim is doing things a little differently. He’s saving to buy his home with cash instead of a loan.

Tim is drawn to this goal because “I want to feel more secure and safe financially. Instead of spending money on a big mortgage bill every month, I can use it to save and focus on my business,” he explained. As he grows his career, he feels that not worrying about a mortgage could help him focus, making it one less burden as he pursues entrepreneurship.

How is he working toward this goal? By keeping his expenses low. He’s selling the existing properties he owns and moving in with his parents for the next few years, setting aside the money that used to go toward paying rent or a mortgage and putting it into a mid-term investing account.

Different Goals, Similar Strategies

Millennials have unique goals regarding personal finances, but the techniques they use to reach them are familiar. They may not be saving for the traditional home, wedding and 2.5 kids, but they still have goals that reflect their values and need a means to get there. From cutting expenses to automating contributions, these strategies are important for saving for any type of goal.