It’s always interesting to see how successful each generation can be and the impact they can have on the economy. With millennials starting to make their mark on the world, I thought it would be interesting to dig a little deeper into the financial life of this generation.
Who Are Millennials?
Millennials are frequently labeled as materialistic, spoiled, and saddled with a sense of entitlement. This isn’t necessarily true for all millennials, but it is the impression the group, as a whole, gives off. Many people in the millennial generation feel they will not be able to achieve their material goals like finding a dream job or buying a house. Some are also concerned they will have to retire much later in life compared to their parents and grandparents.
The economic fallout from events such as 9/11 and the market crash of 2008 have resulted in the adoption of an increasingly global mindset for most millennials. Millennials are also considering social and environmental responsibilities when deciding where and how to invest their money. Many choose to follow their own instincts or go along with their peers for investment strategies versus following the advice of financial professionals or even their own parents.
A lot of millennials tend to carry more consumer debt than previous generations did at their age. Student loans and the average salary not stretching as far have a big part to play in this. With employment rates decreasing and education rates continuing to rise, a lot of millennials struggle to make ends meet. A survey done by Charles Schwab shows 2/3 of the people surveyed are living paycheck to paycheck and only 38% feel financially stable.
Another survey done by the American Institute of Certified Public Accountants shows that over 75% of people in the millennial generation strive to have the same clothes, cars, and technology as their friends and peers. A lot of the pressure people feel to match the financial habits of their peers stems from social media. Big milestones, such as buying a new car or house, are posted for all to see on social media platforms. This drive to be competitive with materialistic things has led 50% of this group to use credit cards for basic daily necessities such as food and utilities.
Some other shocking spending habits revealed that over 25% have late payments or are currently dealing with bill collectors. There are over 50% still receiving some form of financial aid from their parents. A recent Harvard study showed only 31% of young adults are homeowners. This is a historic low for the under 35 demographic. Studies have also shown that a record number of young adults are still living with their parents compared to previous generations. Part of the reason behind these changes is that the average millennial has a lower income than past generations did at the same age.
Finding the “dream job” is becoming more and more difficult for young adults now entering the workforce. Pay and compensation still play a big role in selecting a job, but they are not always the number one factor. Other issues such as autonomy, respect, and being treated fairly are rising to the top of young professionals’ requirement lists. They expect most employers to be able to provide these. Access to digital information is also making people more aware of what peers and supervisors are earning. Additionally, it provides information on what they, themselves, are actually worth and what their rights and privileges are. Most millennials are seeking work that enriches themselves and the world around them, and are unwilling to settle for less. Normally, this would be a great thing, but with the current unemployment rates, finding these jobs isn’t always easy.
It seems like each generation has been branded with their own financial difficulty over the years. Hopefully, the millennial generation and generations to come will be successful and live fulfilling lives.
Winter may be on its way out the door (knock on wood.) That means lots of melted snow refreezing overnight. Check out our last blog post for 5 Tips For Winter Driving