Bouncing Back: New Tunes for Millennials Trying to Make It

A young man works on financial planning on the sofa in his living room.

(Image credit: Getty Images)

published 23 April 2025

Editor’s note: This is the third article of a series about wealth planning for different generations. Part one is Talkin' 'Bout My Generational Wealth: Baby Boomers, and part two is Come as You Are: Wealth Management for Gen X . Part four will address financial planning for Generation Z.

Just as a great club DJ crafts a mix that transitions smoothly between tracks, effective wealth management for Millennials involves navigating a landscape marked by a mix of modern challenges and rebounds.

For a primer on how to craft a great music playlist, I recommend watching the movie High Fidelity.

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The Millennial generation, also known as Gen Y, was born from 1981 to 1996. They are now 29 to 44 years old and find themselves in the midst of the wealth accumulation phase of life.

This article, the third in a series drawing inspiration from iconic songs, moves from the grunge of Nirvana to the digital beat that has defined a generation shaped by early economic upheaval.

Using the sounds of our time, I have a few recommendations to keep the music hopping and make this time of life an important period of wealth creation.

'Rolling in the Deep': A dark economic backdrop

The first song of a playlist is important, and this playlist’s first song is pretty dark.

This generation’s entry into adulthood accompanied the 2008 financial crisis, which echoed the somber tones of Adele’s "Rolling in the Deep" — where opportunities for growth and prosperity seemed deep in the abyss.

Just as this age group was graduating from college and entering the workforce, the market downturn of the financial crisis disrupted early career trajectories, which in turn delayed wealth building and stability.

Despite technological advancements and economic recoveries, real wage growth has not kept pace with inflation, widening the gap between financial expectations for adulthood and reality.

The relative wage stagnation has forced many to face the grim music of financial instability, delaying this generation from advancing from saving to investing.

'Can’t Hold Us': Strategic financial beats

Despite a slower start and continual economic uncertainties, the second song on Millennials’ playlist, by hip-hop duo Macklemore & Ryan Lewis, will help improve the mood a little.

Using the high-energy song “Can’t Hold Us” as motivation, sound financial planning can help this generation push forward.

Foundations of financial planning. Effective financial planning for Millennials involves a comprehensive understanding of both income and expenses. It's crucial to create a budget that accommodates longer-term savings goals, while still managing day-to-day expenses.

This generation also needs to consider how they can use financial planning tools and technology to better track their progress and adjust their plans in real-time.

Navigating homeownership. The impact of past economic instability has left many Millennials cautious about buying that first home. Post-Financial Crisis, higher housing prices, coupled with more stringent lending standards and heightened mortgage interest rates, have meant that many in this generation may delay or forgo home purchase.

For those opting out of immediate homeownership, investments in real estate investment trusts (or REITs) may provide a less burdensome way to benefit from real estate appreciation and income without the direct challenges of a significant down payment and mortgage payment.

Emergency funds. Creating an emergency fund is essential for mitigating risks associated with sudden job loss or unexpected financial expenses. This fund acts as a financial buffer that can help maintain stability during economic downturns or personal crises.

For Millennials, who value security but may face more frequent career transitions, having an emergency fund of at least six months is a critical component of a sound financial plan.

Debt and cash management. With student loans being a significant burden, understanding how to manage and prioritize different types of debt is essential for financial health. Millennials should focus on paying down high-interest debts first, as these are costlier over time.

Knowing how to leverage debt effectively — such as choosing when to refinance or consolidate — can also lead to significant savings and better credit scores.

Some debts are also better than others when taking into consideration the possibility of potential tax deductions, which could enhance your bottom line.

Remember: Money is fungible, so be smart about which debt to pay down first.

Education savings. For those with young children, it’s never too soon to start saving for the next generation.College Maximizing tax-preferred savings vehicles like 529 plans can greatly reduce the future burden of education expenses.

By starting early, Millennials can take advantage of tax-free, compounded growth, making it easier to manage higher-education costs for their children.

Retirement savings. Given this generation is expected to not only live longer, but also work longer to enjoy a well-funded retirement, Millennials need to be strategic about their retirement planning.

This involves not only saving but also investing wisely to ensure that their retirement funds can withstand longer periods of inflation and potential market fluctuations.

A diverse portfolio that includes a mix of equities, bonds and other investments can help achieve the growth needed to support a longer retirement.

'Count on Me': Young families require estate planning

Last up for this playlist: Can it be anyone but Bruno Mars?

In addition to securing one’s financial future with a sound estate plan, this generation also needs to start thinking about their families’ future — and recognize that there are others who are counting on them for support — financial, emotional and otherwise.

Many Millennials have started families and have small children. While their assets level may not be at the point where significant and complex tax planning is necessary, please keep in mind the following “musts” for families with young kids:

Guardianships. At this stage in life, the most critical part of an estate plan is arguably naming a guardian for your minor children. Without a properly executed will in place naming a guardian, this decision would be determined by the courts.

In most cases, interested parties, including family members or friends, will likely step in and petition the court to be appointed as guardian — but this would cause unnecessary delays and uncertainty at a time when stability for young children is most needed.

This is such an important decision and provision in the will that I often advise clients to name at least two layers of successors should your first and second choice not be able to serve.

Risk mitigation. From a risk mitigation perspective, life insurance is a critical component. If a parent were to pass away and his/her income is cut off, would there be enough of a reserve to take care of the family going forward?

Here is where a simple term insurance policy may be helpful. The premiums are relatively inexpensive when the insured is young and healthy. I often get asked, how much insurance coverage do I need? That depends on what problem you’re trying to solve.

One recommendation is to identify a financial need, consider its associated time horizon, and then back into the number.

For example, if you’re looking to have enough insurance coverage to pay off your mortgage and/or college tuition, what is the amount you need today, assuming a reasonable rate of return, that would cover your mortgage and your children’s future college expenses?

Once you have the amount in today’s dollars, then you can price out how much those premiums would be and adjust from there to fit your budget.

Millennials and Gen Ys got off to a challenging start. But with proper planning, the future can be as bright as Beyonce’s catchy “Break My Soul,” which talks about finding a new drive, fresh motivation and a new foundation.

Many Millennials have navigated successfully the choppy waters of a post-financial crisis world and moved into the wealth accumulation phase.

No reason that the last song in this generation’s playlist can’t be a great one!

Up next: We move to Billie Eilish and continue with the financial journey of Gen Z, born from 1997 to 2012.

Wilmington Trust is not authorized to and does not provide legal or tax advice. Our advice and recommendations provided to you is illustrative only and subject to the opinions and advice of your own attorney, tax advisor or other professional advisor.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Alvina Lo is responsible for family office and strategic wealth planning at Wilmington Trust, part of M&T Bank. Alvina was previously with Citi Private Bank, Credit Suisse Private Wealth and a practicing attorney at Milbank, Tweed, Hadley & McCloy, LLC. She holds a B.S. in civil engineering from the University of Virginia and a JD from the University of Pennsylvania. She is a published author, frequent lecturer and has been quoted in major outlets such as "The New York Times."