Financial tips for millennials

The Sunday story by the Review-Journal’s Bailey Schulz (“Younger adults failing to save for retirement”) was interesting. But I think Ms. Schultz was much too hard on the millennials.

To recap, youth are not much into saving money. But wait. According to the Federal Reserve, the current inflation rate is around 2 percent a year while interest on savings accounts amounts to less than a latte a month for most people. Zillow, the real estate research company, is eager to let me know that my house has gone up in price maybe 6 percent in the past year or so, and that they expect it will go up another 6 percent over the next year. In other words, assets are inflating at least three times as quickly as savings in the bank.

So what should millennials do? Here’s my suggestion: Maintain excellent credit and borrow as you need for unusual expenses. Especially try to borrow to acquire a home, and make the payments confident that the dollars you use are worth less than those you borrowed. Know that over the long haul your property will be inflating nicely right along with the dollar.

Eventually, inflation will give you a little equity. That will allow you to acquire a credit line. Pay your student loans back as they are due, but don’t make extra payments unless you are unusually flush. And, finally, be really nice to your older relatives. They may turn out to be your savings account.