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Ask Brianna: How do I save for goals other than retirement?

“Ask Brianna” is a Q&A column from NerdWallet for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college.

Q: I know I should save for retirement, but that’s so far away. How do I also save for the things I want sooner, like a house, a vacation or a move to a new city?

A: You’ll see me write about retirement over and over in this column — it comes with the territory as a personal finance writer. Talking retirement gets my planning, strategizing, and, yes, lecturing engines going, because Americans need encouragement. Almost half of families had no retirement account savings in 2013, according to an Economic Policy Iask-briannaanstitute analysis of Federal Reserve data.

You’ll need to start saving now if you want your post-work years to be filled with excitement and possibility, not anxiety over how to pay your bills. But while you save, you can also live a varied, satisfying life in your 20s and 30s. Decide on your priorities, make a plan, and be savvy about where you put your money. Smart money management now means more fun stories to tell your grandkids when you’re happily retired later on.

GET YOUR RETIREMENT SAVINGS ON TRACK

As a 20- or 30-something, you have one big advantage over older folks when saving for retirement: time. The money you earn on your investments has decades to grow, so you can save a little every month without drastically cutting back on other expenses. If you wait to save, you might have to make some tough sacrifices to catch up in your 40s and 50s.

Contribute to a 401(k) if you have one at work, and add enough to match your company’s contributions if they’re offered. Open an individual retirement account if you don’t have a 401(k). Aim to save 10 percent of your gross income for retirement, which can include an employer match.

PRIORITIZE OTHER GOALS

Pick your top nonretirement goals, decide when you want to achieve them, then create a savings plan. You can set up direct deposit at work so part of your paycheck goes straight into your savings account, says Damian Dunn, a financial planner and president of NextGen Financial Life Planning LLC in Auburn, Indiana. You’ll be less likely to spend your money if it’s not easily accessible, he says; federal law limits withdrawals from savings accounts to six per month.

Here’s how to save for the three common goals you mentioned in your question:

  • Down payment: Renting works just fine for many 20- and 30-somethings, especially if you want to be able to move easily. But if buying a house is a major dream of yours, start saving as early as you can to get close to the 20 percent down payment most conventional mortgage lenders prefer.

The best place to save depends on how soon you think you’ll buy. An online savings account is the most flexible, but a certificate of deposit, also known as a CD, will offer a higher interest rate if you can wait for four or five years. CDs require you to keep your money locked away at a bank or credit union for a certain amount of time, which will keep you from dipping into your account in the interim.

  • Travel: Online savings accounts are also ideal for upcoming trips; some let you set up sub-accounts you can name (say, “Costa Rica Adventure Fund”) to keep you motivated. Consider using a cashback or travel rewards credit card before your trip, especially if it has a sign-up bonus, to get discounted flights or hotel stays. Pay off your balance each month so you don’t pay interest, which is money that could go toward your vacation instead.
  • Moving: Your 20s is an ideal time to explore careers and live in different places. But with rent and student loans to pay, you’ll need to save money before you can run away to Los Angeles to pursue your acting dreams. Save at least six months’ worth of necessary expenses so you have a buffer if you can’t find a job right away. Before the move, try making extra money by negotiating down or canceling subscriptions like cable, taking on extra part-time work or socking away tax refunds and bonuses.

A full life is more than just planning for the future, and your postgrad job lets you afford the trips or leather jackets you could only covet when you were in college. You should enjoy those things in the decades before you retire. All you have to do is plan for them.

 

On the Web

NerdWallet: Which CD Term Length Should You Choose?

https://nerd.me/3-nerdwallet-banking

 

This column was provided to The Associated Press by the personal finance website NerdWallet. Brianna McGurran is a staff writer at NerdWallet. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe.

 

Divided America: Diverse millennials are no voting monolith

The oldest millennials — nearing 20 when airplanes slammed into New York City’s Twin Towers — are old enough to remember the relative economic prosperity of the 1990s and when a different Clinton was running for president.

The nation’s youngest adults — now nearing 20 — find it hard to recall a reality without terrorism and economic worry.

Now millennials have edged out baby boomers as the largest living generation in U.S. history, and more than 75 million of them have come of age.

How they vote on Nov. 8 will shape the political landscape for years to come.

Yet with less than two months to go before Election Day, the values of young Americans whose coming-of-age was bookended by the Sept. 11, 2001, terrorist attacks and the Great Recession are emerging as an unpredictable grab bag of fiscal conservatism and social liberalism.

What they share is a palpable sense of disillusionment.

As part of its Divided America series, The Associated Press spent time with seven millennial voters in five states where the oldest and largest swath of this generation — ages 18 to 35, as defined by the Pew Research Center — could have an outsized influence in November.

They are a uniquely American mosaic, from a black teen in Nevada voting for the first time to a Florida-born son of Latino immigrants to a white Christian couple in Ohio.

Taken individually, these voters illustrate how millennials are challenging pollsters’ expectations based on race, class and background in surprising ways, reacting to what they see as the loss of the American Dream. They are intent on shaping something new and important that reflects their reality — on their own terms.

“Millennials have been described as apathetic, but they’re absolutely not. I think you can see from this election year that they’re not, and that millennials have a very nuanced understanding of the political world,” said Diana Downard, a 26-year-old Bernie Sanders supporter who will vote for Hillary Clinton. “So yeah, I’m proud to be a millennial.”

Just 5 percent of young adults say that America is “greater than it has ever been,” while 52 percent feel the nation is “falling behind” and 24 percent believe the U.S. is “failing,” according to a GenForward poll released this summer.

The first-of-its kind survey of young people between the ages of 18 and 30 was conducted by the Black Youth Project at the University of Chicago with the Associated Press-NORC Center for Public Affairs Research.

Fifty-four percent believe only a few people at the top can get ahead in today’s America and 74 percent say income and wealth distribution are uneven, according to the poll.

Brianna Lawrence, a 21-year-old videographer and eyelash artist from Durham, North Carolina, identifies with those numbers.

She was just 7 on Sept. 11 and the immediate aftermath of the terrorist attacks is the only time she can remember the nation feeling united, even if only by grief. With $40,000 in student debt, she’s working hard to establish her own cosmetic business after graduating from North Carolina Central University. She plans to vote for Hillary Clinton, but feels America has lost its way.

“My biggest hope for this country is for us to come back together as a community. As a United States of America, to unite together again,” she said.

But millennials know that getting to that place won’t be easy. Many, like Lawrence, are saddled with college debt and have struggled to find jobs.

In Denver, 1,600 miles to the west, Downard also has almost $40,000 in student debt that’s already changed her path. A dual U.S. and Mexican citizen, she feels she can’t afford to work for an overseas organization — one of her dreams — and plans to delay having a family at least 10 years.

“We went to college in pursuit of a better life and really, now, we’re kind of just paralyzed by our student debt,” said Downard, who works for a nonpartisan organization that works to improve youth voter registration. “You can’t even think about those sorts of alternative options.”

In part because of these economic pressures, a 2014 Pew Research Center poll found that — for the first time in more than 130 years — adults ages 18 to 34 were slightly more likely to be living with their parents than with a spouse or partner in their own residence.

And one in four millennials say they might not ever marry, a Pew survey found.

Only 8 percent of young adults feel their household’s financial situation is “very good,” and education and economic growth ranked No. 1 and No. 2 as the issues that will most influence their vote, according to the GenForward poll.

“We might be in a ‘good-ish’ finance situation right now as a country, but I was always taught there’s ups and downs in the finance world and with every up, there’s a down. So we should be preparing for that down to come,” said Brien Tillett, who graduated this spring from a high school just miles from the Las Vegas Strip.

Tillett, who turned 18 in July, was 10 when the recession hit and sucked the wind out of his family. His mother, a single parent, was in a car accident that hospitalized her for three months and, with no safety net, the family struggled.

“It was to the point where I would not ask my mother to go hang out with my friends because I didn’t want her to worry about money,” said Tillett, whose brush with insolvency has deeply influenced his views.

The national debt is his No. 1 concern.

As a young black man, he’s turned off by remarks by Donald Trump that he finds racist and xenophobic, but likes Trump’s aggressive stance on the economy.

“We’re trillions of dollars in debt and that should not be happening,” said Tillett, who started running track at a two-year college in August.

He strongly considered voting for Trump, but will now vote for Clinton because Trump has become “a loose cannon.”

Still, he’s angry about Clinton’s use of a private email server when she was secretary of state.

“We have to basically question if we can truly trust her with all of our nation’s secrets,” he said.

Anibal David Cabrera was in high school when Tillett was just a small boy — but he’s part of the same generation.

The son of a Honduran mother and Dominican father, he graduated from college in 2008 as the recession was picking up steam. A finance major, he wanted to work for a hedge fund or bank, but the economic collapse meant jobs had dried up. Eventually Cabrera, now 31 and living in Tampa, Florida, got an accounting job at a small tech firm.

He feels he’s entering the prime of his life a few steps behind where he could have been, through no fault of his own.

A Jeb Bush die-hard in the primaries, he’s now supporting Trump and hopes the business mogul can make good on his promises.

“My biggest hope for the country would be a prosperous economy. That is something my generation has kind of never seen,” Cabrera said. “We never got to experience the rapid growth of the ’80s or the ’90s, and I think my generation would love to see that.”

Shared pain does not lead to shared views among his generation.

Millennial voters’ disdain for traditional party affiliation have made them particularly unpredictable. Half describe themselves as political independents, according to a 2014 Pew Research report — a near-record level of political disaffiliation. As a generation, they tend to be extremely liberal on social questions such as gay marriage, abortion and marijuana legalization. Yet they skew slightly conservative on fiscal policy and are more in line with other generations on gun control and foreign affairs.

Trip Nistico, a recent graduate of the University of Colorado, Boulder’s law school, is an avid supporter of gun rights who goes to shooting ranges but also supports same-sex marriage. The 26-year-old Texas native voted for President Barack Obama in 2008 — his first presidential election — and Mitt Romney in 2012.

“I’m pretty liberal on social issues. I don’t really think that — on a national level — they’re really as important as some of these other issues we’ve been discussing,” he said.

He’s supporting Trump because his preferred candidate, the Libertarian Party’s Gary Johnson, isn’t likely to crack the polls.

Trump remains wildly unpopular among young adults, however, and nearly two-thirds of Americans between the ages of 18 and 30 believe the Republican nominee is racist, according to the GenForward poll. Views of Hillary Clinton also were unfavorable, though not nearly to the same extent.

Many millennials are angry that Democratic challenger Bernie Sanders has withdrawn and are disillusioned with the electoral process.

Forty-two percent of voters under 30 have “hardly any confidence” that the Republican presidential nomination process is fair and 38 percent feel the same about the Democratic process, according to the GenForward poll. The survey was taken before the leak of Democratic National Committee emails that roiled the Democratic Party.

Bill and Kristi Clay, young parents and devout Christians from rural Ohio, offer a portrait of millennials struggling to choose a candidate who matches their values.

They have two sons, 4 and 6, and are adopting a child from the Philippines. They serve meals with their church at inner-city soup kitchens in nearby Columbus and have a mix of political views that, Bill Clay says, comes from following “the lamb, not the donkey or elephant.”

Kristi Clay opposes same-sex marriage and abortion and names those as her top issues this election. Yet the 32-year-old school librarian is still reluctantly leaning toward voting for Clinton. “You have to look at the big picture,” she says.

Bill Clay, meanwhile, shares his wife’s views on the more conservative issues, but they hold what some would consider more liberal views on matters such as immigration.

“If we’re going to try to be Christian-like, and embrace people, I don’t think you can shut the borders to an entire group of people just because of the fear that some of them don’t like us,” said Clay, 33, who voted for Barack Obama in the last two elections but supported Republican Marco Rubio this time.

Yet that strong faith has not helped him find much inspiration in the current candidates, both of whom he sees as self-serving and unwilling to budge on important issues.

“I’m feeling a little pessimistic this year,” he said.

The Clays say they will vote no matter what, but whether their millennial brothers and sisters do the same is an open question.

The millennial vote rose steadily beginning in 2002 and peaked in 2008, with excitement over Obama’s first campaign. In 2012, however, just 45 percent of millennials cast ballots and participation has leveled off or dropped ever since, said John Della Volpe, director of polling at Harvard University’s Institute of Politics.

“They have a somewhat different perspective in terms of politics, “Della Volpe said. “It hasn’t really worked. They haven’t been part of a movement that’s been effective.”

Yet Tillett, the teen in Nevada, exudes youthful idealism as he talks about casting his first vote in a presidential election.

“It means a lot to me personally because I’m making a difference in my life and in the country. My vote does matter,” he said. “It really does.”

U.S. Senate’s power brokers are aging; several seeking new terms

Millennials have emerged as the nation’s largest living generation yet that demographic shift isn’t reflected in the upper reaches of the Republican-controlled Senate, where the body’s oldest members are the power brokers.

And several are asking voters for new six-year terms.

At 82, Chuck Grassley wants Iowans to send him back to the Senate for a seventh time. The Republican chairman of the Judiciary Committee pitches his seniority as a plus, telling voters he gives them a “big voice at the policymaking tables” in Washington.

Arizona’s John McCain, the 79-year-old chairman of the Armed Services Committee, also is running for re-election. So are Richard Shelby of Alabama, the Banking, Housing and Urban Affairs Committee chairman who turned 82 on Friday, and 71-year-old Johnny Isakson of Georgia, who leads the Veterans’ Affairs Committee and the Senate’s ethics panel.

Other committees are controlled by senior Republicans whose terms don’t end for at least a few more years. Orrin Hatch of Utah, the chairman of the Finance Committee, is 82 and has been a senator since 1977 — the same year Jimmy Carter was inaugurated as president, Elvis Presley died and the first Stars Wars movie came out.

Oklahoma’s James Inhofe is 81 and heads the Environment and Public Works Committee. Pat Roberts of Kansas, 80, runs the Agriculture Committee and 78-year-old Thad Cochran of Mississippi leads the powerful Appropriations Committee. At 75, Lamar Alexander of Tennessee is chairman of the Health, Education, Labor and Pensions Committee.

Senate Majority Leader Mitch McConnell of Kentucky is 74.

Three senior Democrats have opted to retire at the end of the year: Minority Leader Harry Reid of Nevada, who is 76, along with Maryland’s Barbara Mikulski, 79, and California’s Barbara Boxer, 75.

But Vermont Democrat Patrick Leahy, 76, is running for another term. Leahy, first elected in 1974, has been in office longer than any other currently serving senator — 41 years. He’s the top Democrat on the Judiciary Committee.

The average age of all senators actually has decreased from 63 to 61 since 2009 due to younger members from political parties being elected, according to the Congressional Research Service. The youngest are members of Generation X: Sens. Tom Cotton, R-Ark., who turns 39 on May 13, and Cory Gardner, R-Colo., 41.

Millennials, who are Americans born between 1981 and 1997, numbered 75.4 million as of last July and surpassed the shrinking baby boomer population, according to Pew Research Center senior researcher Richard Fry. He projects millennials to peak in 2036 at 81.1 million.

The Senate also remains overwhelmingly white and male. Of the Senate’s 16 full-time “standing” committees, 10 are chaired by white Republican men over the age of 70. One is led by a female Republican: Sen. Lisa Murkowski of Alaska runs the Energy and Natural Resources Committee.

Sen. Susan Collins, a Maine Republican, leads a special Senate Committee on Aging.

Overall, there are 20 women in the Senate — six are Republican.

There are three Hispanic senators, two African-American senators, and one Asian-American senator.

Age, strictly as a number, can be deceiving. Cochran isn’t the oldest senator, but questions about his mental state have persisted since he was re-elected to a seventh term in 2014.

During a bruising primary campaign in Mississippi, supporters of Cochran’s tea-party backed opponent accused Cochran of erratic behavior and struggling to recall recent events.

During Senate hearings, Cochran reads primarily from prepared text and he often cedes his prerogative as chairman to be the first to question witnesses. Cochran asked no questions of Defense Secretary Ash Carter and Gen. Joseph Dunford, the chairman of the Joint Chiefs of Staff, at an April 27 hearing despite deep divisions between Republicans and the Obama administration over defense spending and the strategy for defeating the Islamic State group.

Chris Gallegos, Cochran’s spokesman, said the allegations during the 2014 primary were “not based on facts.” He said the senator is in fine health and keeps a vigorous schedule. “He knows what’s going on,” Gallegos said.

McCain shows no signs of losing his edge. He’s prone to skewering witnesses who appear before the Armed Services Committee, particularly if he finds inconsistencies in their testimony. McCain also regularly fields questions from throngs of reporters as he’s coming and going from votes on the Senate floor.

Isakson announced last June he has Parkinson’s, but said the disease is in its early stages and won’t affect his ability to serve. Parkinson’s is a chronic and progressive movement disorder and it’s caused Isakson to walk with a slower, shuffling gate. Yet Isakson, in his second Senate term, is favored to win a third in heavily Republican Georgia. He won 58 percent of the vote in 2010.

In Iowa, Grassley’s age hasn’t been an issue before. He’s not lost a general election in more than 50 years, usually getting more than 60 percent of the vote. First elected to the Iowa Legislature in 1958, Grassley has served in Congress since 1974 including six years in the House and 36 years in the Senate.

Grassley isn’t the oldest senator. He’s a few months younger than Dianne Feinstein, a California Democrat, who turns 83 on June 22.