How millennials can take control of their finances

As a millennial, you’re juggling a lot: building your career, maybe raising a young family, and working through your personal goals and dreams. With each new milestone, there’s more to celebrate, but there’s also more to manage, especially when it comes to your money. As exciting as these transitions are, they often bring extra financial responsibility — and yes, sometimes more debt. But taking control is often possible, and it starts with understanding where you stand and making sound moves for your future.

Research shows that many millennials are in a financial hole. While the average consumer debt in 2025 topped out at $104,755, the average for millennials hit at $132,280.¹ The bulk of this debt comes from credit cards (78% of millennials carry a balance) and car loans (68%).²

To make sure you’re financially on track to take advantage of these important years, here are five things to consider doing to help optimize and protect your savings.

1. Prioritize debt to pay off

Having started their careers around the 2008 financial crisis, only to face the COVID-19 pandemic 12 years later, millennials have experienced multiple economic events that impacted their debt. When paying down debt, prioritization is key, as the amounts and repayment options can vary greatly.

Activities like online shopping can lead to credit card debt, which charges a high interest rate that can quickly deplete savings. So, too, can student loan debt. Though only 15% of millennials are carrying student loan debt, higher balances — averaging $33,000 for millennials — and changes in repayment plans can make payments higher.³

If you have student loan debt, it likely constitutes a significant portion of your salary and may prevent you from bigger purchases, such as buying a home and properly saving for retirement.

Medical debt also can have a significant impact. Though not everyone incurs this kind of debt, 60% of people filing for bankruptcy carry medical debt.⁴

While owning a home may be an exciting accomplishment, it can lead to high mortgage loans. Millennials have the highest mortgage debt, $312,014, compared to a national average of $252,505.⁵

That’s why it’s crucial to utilize practical budgeting tactics to minimize debt, such as paying down high-interest debt before investing, as the interest charges on the debt can quickly accumulate and outweigh potential investment returns.⁶ A financial professional can also work with you to help build a customized approach that helps you pay off what you owe while preparing you for the financial future you want.

2. Take on a side hustle

If you’re a millennial facing debt or just looking for a way to supplement your savings, taking on a side hustle is a great way to boost your finances. Roughly 1 in 4 (27%) of US adults have a side hustle.⁷ In any economy, having an additional revenue stream can be a great way to earn extra cash or explore new interests. Choosing a side hustle that capitalizes on your skill set and passions gives you an opportunity to earn more faster and enjoy yourself at the same time.

This increase in income should be met with a proper savings plan. Many financial professionals recommend saving 20% of your income as a sustainable, lifelong habit.⁸ A more immediate goal is to have a year’s worth of expenses in your savings account. Once you have savings in place, you can help weather the unexpected without accruing debt.

3. Protect your income

To supplement your healthy savings habits, you should protect your ability to earn income. As a millennial, you may not feel ready to start thinking about middle age, but now is the time to think about how you’d weather a blow to your ability to earn a living. Consider: One in 4 of today’s 20-year-olds will be out of work for at least a year due to a disabling condition before retirement.⁹ What would happen if you became disabled or ill and could no longer work? How would you continue to support your family and yourself? Would you need to drain your savings and retirement? Often this kind of income interruption depletes savings accounts or drives people into debt to cover basic expenses. In this case, a payment into disability insurance ahead of time can help protect your savings, helping ensure you remain financially confident if the unexpected happens.

4. Obtain life insurance benefits

Another form of financial protection is life insurance. When some people hear life insurance, they think of it as something to put off until later. As a millennial, you’re busy building your career while raising a family, and life insurance may be the last thing on your mind. However, having life insurance can help save your family from financial ruin if you pass away prematurely. Our research found that 81% of workers who lost their spouse or partner five or more years ago still feel their finances have not yet fully recovered — and that number increases to 89% for three to four years prior.¹⁰ Look into whole life insurance for a source of guaranteed income with cash value growth potential that can help you diversify your portfolio.^11,12

As you pay for your whole life policy, your cash benefit accumulates over time and builds tax-deferred value.¹³ This cash value can grow to potentially be used for opportunities such as helping to fund a new business or buy a home.^14,15 What’s more, the premiums — or the amount you pay for your policy — are guaranteed to never increase once you purchase the policy, and the death benefit — the amount your beneficiaries get when you pass away — is permanent.¹⁶

If you’re looking for more cost-effective coverage, term life insurance can be an attractive choice. This may be a great option if you’re not at a place to commit to permanent, whole life insurance. While with a term life policy you get coverage for a defined length of time, there are policies that can be converted to permanent life insurance for part, or all, of the coverage period down the line too.

5. Optimize your retirement accounts 

Conversations about retirement tend to center around Gen Xers, but if you’re in your 30s or 40s, now is when you should be preparing for retirement. More than half of millennials owe more in debt than they have money saved for retirement.¹⁷ A great saving strategy is to contribute to retirement accounts, such as 401(k) employer-sponsored plans and individual retirement accounts (IRAs).

Public educational institutions, churches, and certain 501(c)(3) tax-exempt charitable organizations offer 403(b) tax-sheltered annuity plans, which operate similarly to 401(k)s but are available strictly to employees of those types of entities.¹⁸ If you work for a for-profit organization and your employer doesn’t offer a 401(k), or if you’re a gig worker, you can opt for an IRA and contribute up to $7,000 per year (as of 2025), which may be tax-deductible.¹⁹

Restrictions apply if you exceed the income limits or are covered by a retirement plan at work. Typically, workers can write off contributions to their traditional IRA in their yearly taxes, making it appealing for people who want to lower their immediate tax burden.²⁰ Another option is Roth IRAs: With these, you won’t get the benefit of lower taxes today, but you won’t have to pay taxes on the money you withdraw after a certain age when you retire.

If your employer offers a 401(k) program, any contributions you make won’t count towards your taxable income. This lowers the amount of taxes you pay and can potentially even drop you into a lower tax bracket. Additionally, many employers offer a match to employees up to a certain percentage of their salary that they contribute to the company 401(k) plan. Be sure to look into your employer match rate and contribute the minimum required for a match, which can double your contribution — and growth potential.

Gain confidence about your future

While you’re busy growing your career, a great way to take inventory of your finances and help ensure you’re on the right track is by talking with a financial professional. A trained eye can help review your income, savings, insurance, budgets, and more to spot opportunities. They can then help you figure out how to balance your needs today with your dreams for the future.