An Open Letter to Vice News About Their New Personal Finance Show For Millennials

According to Variety, Vice News is set to launch a web-based personal finance show geared towards millennials:

Vice News this week will launch a personal-finance talk show on YouTube, “The Business of Life,” sponsored by Bank of America, which youth-skewing brand says will fill a gap in the media landscape for financial advice aimed at millennial audiences.

The bi-weekly series, premiering Wednesday, April 22, is hosted by Vice contributor and Daily Beast columnist Michael C. Moynihan. Each episode, to run about 20 minutes, will cover issues pertaining to younger consumers, such as dealing with student debt and how plan for starting a family. The show will feature a panel of writers, policy experts and scholars.

I think this is great, but I have some thoughts for them on how to not screw this up:

Dear Vice News,

I’m glad you are looking to help young people with their finances. As a millennial myself, I hear from a lot of young people who are receiving terrible financial advice, so I’m hopeful you’ll get this right.

First of all, please do not apply scare tactics about how screwed young people are because of the economy, student loans or the fact that many of them live in their parent’s basement. This is not helpful and everyone has beaten these stories to death without offering any concrete solutions. Instead, help them figure out how to focus on the things that are within their control.

For example, don’t talk about budgeting or saving for retirement. These topics bore young people and it depresses them to think about retiring at age 65 or tracking every penny they spend. Frame the subject of retirement and saving in terms of freedom to do whatever makes them happy in the future because they started saving so young.

Don’t tell them how bad they are with their finances. Everyone else has already done this. Show them how to utilize technology to their advantage so they can automate all of their big decisions up front (saving, bill pay, debt repayment, investing, rebalancing, etc.) and not have to worry about them week in and week out. Preview the latest technology offerings to show how they can use them to make manage their finances in an efficient manner.

Don’t talk about how the markets are rigged. Teach them about how the financial markets actually work. What’s the difference between a stock and a bond? Help them understand diversification, asset allocation and the correct way to think about risk in the markets with so much time ahead of them.

Don’t tell them how they’re out of luck because they won’t have a pension or social security to fall back on. Show them their choices for the different tax-deferred retirement accounts and which financial firms can be their trusted allies. Teach them about compound interest and the benefits of dollar cost averaging and reinvested dividends over many decades.

Don’t focus on the level of interest rates and how savers are getting crushed by the Fed. Review the different online savings account options and show why it’s so important to build a liquid emergency fund to stay out of debt.

Spend time covering credit cards and the importance of building a good credit score. Carrying high-interest rate credit card debt is one of the worst financial decisions a person can make. Credit cards are not evil if you pay them off every month and utilize reward programs, so talk about intelligent uses of credit cards (i.e. using them for all fixed expenses). People also need to understand the best ways to pay off their current debt loads.

Provide a balanced perspective on the trade-offs between renting and owning a home for young people. Too often people are told from an early age that a house is their biggest investment and constitutes the American dream. This narrative doesn’t consider the flexibility that renting offers millennials nor the costs incurred from home ownership.

Don’t talk about the unemployment rate. Teach them the importance of networking and communication when trying to find a job. And don’t talk about stagnating wages. Spend time discussing ways in which millennials can make more money, either by adding value to their current employer or on their own through a side business so they can have some guilt-free spending.

For family planning, young people will never be completely ready financially, so it’s more about preparing them mentally for that change. The important topics here are things like life insurance, 529 plans, daycare costs and how to save money on new baby expenses (hint: Amazon Mom).

Finally, help my fellow millennials understand that it’s okay to make financial mistakes when you’re young. There’s no shame in that. The big thing is to learn from them. In fact, a great way to teach young people about money mistakes is to interview older generations and ask them what they wish they would have done differently with their money when they were younger.

The two biggest assets a young person has are human capital and time. This gives them some room for error, but they must learn how to harness these assets to their advantage, otherwise, they will be wasted.

In closing, focus on solutions, not just problems. The problems are well-documented. It’s the helpful advice that’s lacking.

Sincerely,

A Millennial Finance Blogger

Source:
Vice News to Bow Personal-Finance Show for Millennials, Sponsored by Bank of America (Variety)